I have looked at some old threads and it seems there are some vastly different philosophies about tagging, and that some folks consider 1000 or more to be too many.
In my experience, most folks who use tagging use it as an indexing system, that is, the list can be potentially infinite. The purpose of tags is to look at the list like you would the index of a book, and not have to remember the terms.
I have noticed that within two weeks of use, tagging has slowed, I'm in the thousands for unique identifiers. Pretty common in librarianship.
If there is something about tagging that just can't be made to work given the pre-existing structure and characteristics of Joplin, might I request/suggest some sort of secondary indexing system? Other people have mentioned key word searches, but that just doesn't work when you're looking for a concept. That's what I often use tags for, something that isn't phrased directly in the text but referred to, or a different term used.
I might have three different tags referring to the same thing because of interconnections between themes that don't quite overlap: For instance: "loci" would have itself as a tag, but also "memory (art of)", and "ars memoraie" as tags.
For me the point of this kind of note taking app is to go extremely granular with indexing and tags, and I...hadn't expected that kind of limit going in, it just didn't occur to me that what I'm familiar with as a basic indexing tool would be limited to such a small number (1000 or so) terms before slowing the app.
I think with the whole concept of Second Brain becoming more popular and as people up their PKM system game, a limitation on tagging is going to have some pretty big ramifications.