It’s not a step backwards because it’s an additive feature; you’ve lost no utility after tags than before. In fact you now have a valuable option to use hashtags or not. Meanwhile, Spending Analytics remain the default way of tracking ones finances & even this is undergoing a redesign.
Naturally, I expect Monzo will improve this tag feature over time but it’s difficult for them to manage lofty expectations when you apply cross-industry comparisons.
P.S. SpaceX to the Mars