actually they don't work the same way and so you can't use them to replace folders. try to create these two tag structures:
"parentA:sub1:tagMustBeUnique"
"parentB:sub2:tagMustBeUnique"
the system will not create the second "tagMustBeUnique". each tag has to be unique in the entire tag tree, or so it would seem. for tags this actually makes sense. not for folders.
also, at present i can go into a folder, add an item, and it is assigned to that folder. not so with a tag. i have to create the item first, then tag it as an additional step. one-off, no problem i guess, though it is a step backwards. however, considering the volume of entries and churn i am dealing with, big problem.
so tags are a fail as a replacement for folders, as they were when enacted by 1password. my largest repository is about 1,300 entries. i also have one that is another 650. so in total i am dealing with 2k entries that are constantly being added, deleted, moved here and there. this won't do.