Some of the advantages of memory tagging have already been mentioned in this discussion.
GrapheneOS itself describes it on X as:
one of the biggest hardware-based security features in the history of computing: hardware memory tagging.
and also:
GrapheneOS will be making heavy use of the hardware memory tagging on the new ARMv9 cores in hardened_malloc.Going to be a massive improvement to exploit protections provided by GrapheneOS and will increase gap with stock Pixel OS even with their memory tagging dev option on.
You can find a good overview of how MTE works here.
Since release 2023112600, memory tagging is activated by default also for apps installed by the user. I personally would leave it like this: If there occur problems with MTE in an app (which rarely seems to be the case - in my case, for example, it only affects a single app), you will receive an error message and can still deactivate MTE for the effected app: App Info> Memory Tagging> disabled.