The option is turned on in "Alert Preferences".
Also all the permissions for "Maximum tag alerts per message" are set to "unlimited".
Analyzing the permissions also show unlimited.
Tried with all add-ons disabled - same issue.
I think I actually fixed it the first time when I changed the permission of maximum alerts from 0 to unlimited. The problem was that the test user I tried it with didn't have permission for the forum where I tagged him.