I think this mechanism is alright. Nerol should undergo cyclisation faster than carbocation rearrangement - because it does indeed give alpha-Terpineol and not something else.
I remember something about cyclisation of Geraniol and Nerol being how 'they' established that Citral exists as two geometrical forms - Geranial (trans) and Neral (cis) since Nerol (from reduction of Neral) cyclised 9 times faster than Geraniol (from reduction of Geranial). hm.