This film canonised the fact that James Bond is a code name
In this film Lazenby's Bond says "This never happened to the other fella" referring of course to Sean Connery's Bond. It's a clear acknowledgement that he isn't the same person.
We also have the fact that Blofeld does not recognise this "James Bond" despite locking horns with a "James Bond" in the previous film. Again a very clear canonical acknowledgement that they aren't the same person.
Therefore it seems clear that James Bond is a pseudonym employed by the secret service in order to protect the identity / family of new recruits. And thus the powers that be could make anyone they wished have the title in any future installments...