There really is no right or wrong answer here. It really comes down to how you want to handle it.
– Tie lines are used when you want to send audio from one device to another without processing/touching it at the device where you are sending/receiving the tielines. For example, if your stagebox is connected to the Mixrack, then it would be appropriate to use tielines to send all of the source’s audio from the Mixrack to the SQ so that the audio is sent to the SQ without it being processed/altered by the Mixrack. Those tieline would be routed into the SQ via the Slink port (ie it wouldn’t be called “tielines” at the SQ end, only the Mixrack end)
– Direct Outs can be used to send audio out farther down the audio path. This way you can send audio to another device AFTER the audio is processed/modified by the “senders” end. You can select the pick point that is appropriate for the situation. If you wanted to send the processed “monitor” audio from the SQ back to the Mixrack to be further routed to the ME system, you would likely use Direct Outs at the SQ end and route them into the tieline inputs at the Mixrack end. You would further route that audio by sending the tieline inputs to the ME outputs – thereby routing the audio through the Mixrack without that audio actually appearing on a Surface or being processed by the Mixrack.
Now that being said, you could purchase another SLink card for the SQ and connect the ME system directly to the SQ instead of the Mixrack. That would simplify the ME audio routing, but ultimately it would provide exactly the same results (with perhaps a tiny bit less latency than having to send it to the Mixrack first).