Interestingly, this is effectively a tag hierarchy (orthogonal to the content), ...

Interestingly, this is effectively a tag hierarchy (orthogonal to the content), which is also a DAG.

I wonder what disadvantages such a tag hierarchy has?

I imagine enforcing the acyclicity is hard/effortful.

Using (inherently hierarchical) folders (with no symlinks for folders) enforces the acyclicity constraint, and avoids diamond issues, so that’s neat.