tar-out uses human-readable owners, which is unfortunate if the user of the resulting tarball has a different /etc/passwd than the guest.
Implementation notes: Since commit 98757e151ae8ad8d334f028690abcc85b91c73e5 it has been possible to promote non-optargs functions (like guestfs_tar_out) by adding optional arguments. So (in libguestfs >= 1.19.19) it should be easy to add optional arguments to the guestfs_tar_out call, encoding this and other flags. Another one mentioned was --exclude= (bug 847881). A single exclude parameter could be modelled as an OString in the generator, but that wouldn't be very useful since you could only use it once. It's probably better to add OStringList and do this properly.
Patches posted: https://www.redhat.com/archives/libguestfs/2012-August/msg00054.html
I pushed a less broken version of this patch upstream in libguestfs 1.19.30.