I would say "kind of", depending on what you're expecting them to do.
Tags in Craft behave the way tags have typically been implemented in CMSes before: they are lightweight, auto-fill enabled, and designed to be created on the fly just by typing into a tag field (whereas every other element relation field in Craft brings up a UI to create a new element). They're just a big flat bucket of terms that you can stick to an element. If this is your need, then tags do exactly what they should.
But out of the box, tags don't have an admin section the way every other element does. They are only created through a field on an entry, and can only be edited by double-clicking them on an entry too. There's no built-in way to delete them. There is a plugin that adds an admin section for them.
I want to avoid an opinionated take on tagging in CMSes but I will say that in general yeah, tags have always been kind of half-baked features in CMSes. The internet has largely moved on from word clouds, and I think the P&T team recognize this. In Craft 4.0 (I think), both Categories and Tags are being converted to Entries and there will be little difference under the hood. I assume tag fields will retain the auto-fill and dynamic creation aspect.