Memory tagging is an important security feature. The way GrapheneOS uses it is explained at https://news.ycombinator.com/item?id=44678704.

Only having 16 possible tags doesn't impact the deterministic protections we provide. One of the tag values is reserved for free data, internal metadata, etc. and can also be used as a form of 16 byte guard page. For heap allocation, we also dynamically omit the most recent adjacent non-free tags and the previous non-free tag for the current slot. There are 15 possible random values but 3 are dynamically omitted.

An attack often needs to use multiple invalid memory accesses where each one would have a 1/15 chance of success from probabilistic MTE alone. MTE gets combined with other probabilistic memory allocator protections. Our main memory allocator also has slot randomization and quarantine randomization.

A future revision of MTE could be easily be increased to 8 bits and it paves the path to having much larger memory tagging in the future too.