Just wanted to note that this still appears to be an issue even with the latest version of PowerCLI (11.0.0 build 10380590) when using pass-through authentication to connect to a vCenter (not specifying credentials for Connect-VIServer). When using pass-through auth, the various Tag cmdlets fail with the "vSphere single sign-on failed for connection" error message that was posted above.
However, if I create a credential object and pass that to Connect-VIServer, the Tag cmdlets work. E.g.,
$cred = Get-Credential
Connect-VIServer vcenter -Credential $cred
This works if you're running things by hand, but is not a great workaround if you're trying to use the Tag cmdlets in an unattended script.