Discussing on the team call today we pondered whether it is feasible for RHOSP 10/11 to workaround this issue by patching the client to explicitly set the relevant microversion when calling `nova boot` with tags.
This would require analyzing the intersection with any microversions occuring after those that work with the feature.
A downstream client workaround has been done for bz1436266, in which the client sets the microversion according to what sort of tagging has been request to allow device tagging to work out of the box as much as possible without needing to pass the --os-compute-api-version flag. This is the best we can do in OSP10 - the real fix will come in OSP11 and microversion 2.42.