Probably could become a problem if you use the default server using the CloudDB. Hundreds of users will probably cause issues with overloading the server unless you use a Redis database instead of the default server (intended for small Projects and non commercial usage).
This is up to you. Both ways could probably be coded to work. 
What will work best partially depends on whether each Tag represents a List; what the app does etc.
An example using a limited number of users Social Distancing ... a CloudDB / Location Marker Tutorial