There is instances where you cannot use a Folder. For example, if you tag an item that was not rendered on the client, ie, in ServerStorage, you will have two seperate folders, on on client and one on server to keep track of the same items. Collection service allows us to treat all objects of the type as one single collection. This way server can access all tagged objects of that type anywhere, and client can access all tagged types on client.
That’s a good point, also same with @Doomcolp 's point prior. Thanks. Can’t mark both as solutions, though, so I’ll just make yours as the solution because it covers something less face-value.