Found the answer in the parent thread, thank you @Quibblekrust@thelemmy.club:
That’s a mention, not a tag. A tag is a private description you save about a user. Only apps have this fearure.
It’s a little weird that they took a well established term (in social media context: tag, id by which to mention a user, also known as ‘tagging’) and gave it a wholly different meaning (tag: label).
I think it came with a pop-up once when it first got added, and I’ve just kept removing it since.
To this day, I’m still not sure what problem it was supposed to fix, or what feature it was supposed to add.