The Tag Buddy plugin enhances tag management in Obsidian by providing advanced features to add, remove, and edit tags in Reading Mode. Users can interact with tags individually, across a note, or throughout the vault with actions like renaming, changing case, and converting tags to text. The plugin supports generating dynamic tag summaries, enabling users to organize and process tagged content effectively. Tag summaries allow for copying or moving tagged paragraphs to specific sections within notes, creating a streamlined workflow for managing content. These features make it a powerful tool for organizing and connecting ideas using tags.