I have just discovered this behavior. I have Tags at the Finder level that I use to help move effectively to “active”, “post”, and “due” content among others. I often tag folders with these tags. I keep the important tags in my Finder Sidebar.
I just discovered that most* apps do not allow you to see tagged folders in their Open File dialogs.
Create a tag called “test”
Put the tag in your sidebar
Label a folder or two with the tag
Try TextEdit and Numbers → open File, click on the “test” tag in the Sidebar → (flicker and then nothing)
Default Folder X allows you to see and apply tags, but you can’t use tags as search criteria.
So, it doesn’t solve the OP’s problem.
I am seeing the same behavior in TextEdit. When I select a tag to display in the open/save dialog box — and not just when that tag is in the sidebar — the tagged folder does not appear. However, the same action in Preview shows the tagged folder.
Apple’s Mac help is sorta weird about tags. It says that tagging files and folders is possible, but all of the examples and descriptions are for files, not folders. It seems like tagged folders are second-class citizens.
I rarely tag folders, so I haven’t noticed this behavior before. It seems like a bug.
It’s even worse than the Touch Bar: tags are second-class citizens at the desktop level, while they are first-class citizens at the filesystem level.
Apple either decided not to expose much tags related stuff because they thought most people would get confused, or perhaps there are technical reasons (like, say, searches over a filesystem with a million tags would be too slow to be practical). But anyway this is a half assed implementation.