It all depends on what you want to use your tags for, and what’s the target of the tag, so to speak. There is also something to be said on the lifespan of a tag
Pure placement of tags
If you want to tag a note, it belongs in the frontmatter, if you want to tag a sentence or a section, it belongs in the text. So then question becomes why would you want to tag either of those.
I’m tagging sentences/blocks/sections mostly due to the need to action on that piece of text. Like if you want to tag a task as the #next task to do within a list of task, or if you want to #rewrite a part of some text, or #continue-from-here (not a good name but it kind of indicates that this were you left reading that article/note, and where you’d want to continue on a later stage). All of these belong in the text, and are ready for searching and locate the pinpoint of their importance.
On the other hand, a note can be tagged with some of the more actionable tags, like #rewrite or #split, but it can also be tagged for more organisational causes, like type of note, like #person or #reference, or which period it belongs in. E.g. I tag most of my daily notes with something like #year/2023/02.
And some belong in both categories, like I tag people in my vault with #P/NameOfPerson, and this is placed in the frontmatter at the main page of the person, and just in the text when I’m placing a weak reference to the person within a note. (For a stronger reference I used the link to the note)
Longevity of tags
Another point I would make whilst on this subject, is that for me there is also something related to the longevity of the tag, which needs to be addressed. I’m slowly moving to the stance that nothing should be tagged in the long run, and that tags are for shorter time spans (or more unorganised organisation purposes). (This is a work in progress, or something I’m contemplating myself, so it’s not written in stone)
I’m starting to lean towards that tags are mostly used for searches, and not established connections. This can clearly be seen when using tags like #nextAction or #waitingForSomeone, or other action-related tags. These will naturally shift as time goes by.
It’s not as clear but when you start to use them for pure organisation purposes like tagging a note with the type of note, I’m thinking that this usage should probably be turned into a field of its own, and not stay a tag. Due to this I recently moved all my tags of #journal, #reference, #travel into a type:
field in the frontmatter. This’ll transform an unify some of the scripts/queries I’m using, and solidifies the meaning of this markup.
This is also the reasoning behind the “unorganised organisation purposes” statement above. I’m thinking tags are great to use when you’re not entirely sure how to organise it, and you’re still working out the details and how you’d like it to look. Then using tags is easy, and fast, and reworkable. The tag section is the right side pane is then a very useful tool, and you can easily see when some tags rise from being an occasional markup, into something more substantial.
These are the three top tag sections in my vault:

And from this I can see that I should consider switching the #Ă…r/...
(aka #Year/...
tag into something more permanent, to avoid cluttering up the tag list, and similar I could/should consider doing something similar for the #P/...
(for people) and #SO/...
for (Places and Organisations) structures. But the latter two I’m using also for weak referencing, so they will most likely stay as is.
In summary, I think tags belongs in both frontmatter and the text, due to the nature of tags being used in queries and searches, and then placed accordingly to whether they refer to the note or a smaller context. And that one should also consider for how long a tag should remain a tag, before being moved into another markup like a field in the frontmatter (or text), as I’m kind of thinking that tags should be short-termed, and move around a little.