I am having a big problem using Tags on two different Macs. I have an M2 Pro Mac Mini and a M3 MacBook Air. Both are running Tahoe 26.6.1. Simply put, when try to attach a tag to a file, it stops working after a while. The tag menu opens but when I click to apply the tag to the file, nothing happens. I have tried several fixes for this including force quitting and relaunching finder and deleting then reindexing Spotlight. Basically it will work for a few minutes then stops working again. The problem has been on going for a couple of months and really started on the MacBook Air and now is affecting the Mac Mini. I can usually apply about 3-4 tags before it stops working. This is a big problem as I use Hazel running on the Mac Mini to move files to their final resting place after I am done with them. Can anyone offer any solutions? Thanks!
Tags are great when they work, but if not…
One of the results:
My Finder tags are not working in macOS 1… - Apple Community
Unfortunately, no easy fix… You are not alone.
The problem is to debug this issue. I remembered Howard Oakley blogging about it in the past and was able to find his article:
You may have to debug more using the methods described by Howard Oakley (are those attributes really being set, do they vanish eventually, is Spotlight working as it is supposed to, and so on).
Your issue sounds as if something is messing with extended attributes or hidden files needed for tagging, Spotlight/Finder.
Other ideas are to boot into your system as a different user or in safe mode in order to identify potential issues with third-party tools messing with macOS, extended attributes, or Spotlight indexing (ruling out third-party stuff one by one). Does this happen on every drive? Only in some folders? Are those drives/folders being synced by tools? iCloud Documents? You mentioned Hazel… What does happen when you disable affected Hazel rules (or even Hazel altogether)?
The issue with tags is that their preservation across file systems, cloud services, and so on is not trivial. I stopped relying on tags in Finder years ago because of their delicate nature. To me, it is files, filenames, and a folder structure that fits my needs. Those work across all systems everywhere.
Maybe, someone over here who is a Tags Power User 
has some ideas…
If not, it may be an idea to also try to get help in the Hazel support forum: Noodlesoft Forums • Index page
Thanks for the reply. I have been looking at this problem off and on for months and I am thinking I just need to overhaul my way of doing things. I hate to say that tags are abandoned right now but it appears Apple has not updated the way they work since they were introduced. I have to use OneDrive at work and since the tags do not carry over through it, I have known for a while that I am going to have to come up with a better system. Thanks again.
Do those files with tags sit inside folders that are being synced with OneDrive? If so, the possibility of this causing the issue is quite high. As you already have pointed out, tags get lost with OneDrive and maybe even more than just tags.
Tags should work locally within Apple’s ecosystem. Then again, even with iCloud involved, issues can arise (see Howard Oakley’s blog). Other cloud solutions, network drives, different ecosystems than Apple’s in combination with tags… The proverbial can of worms… 
Actually they are in an iCloud Drive file. I have a “work in progress” folder that I keep items that I am actively working on in. When I am done, I apply a tag and then Hazel will move the file where it needs to go. Work items will go to their home in OneDrive while my personal files go to another file inside iCloud Drive. After I got my Mac Mini I figured out pretty fast that OneDrive did not keep the tags applied. I used to have my work in progress file in OneDrive but moved it to iCloud afterwards. The Mac Mini is running Hazel and some other server and background tasks at home all the time while the MacBook Air is with me all day at work and on the move.
Thank you for answering! iCloud Drive is known for messing up tags, too. It should not do that, but sometimes it is happening (see the mentioned blog post by Howard Oakley).
Good luck with the debugging! 