I don't think there's a specific reason we didn't, other than that no one was asking about it at the time. What should happen if a question has both a tag you list as a favorite and one you ignore?

The OP is mentioning filtering method. If he wants to ignore tag A but follow tag B. But a question have both tag than the question won't show to him.

That's one possibility. If it also has a favorite tag, though, the person might want to see it. So it seems like we need to choose one of:

1. Favorite overrides ignored (you see it as a favorite)
2. Ignored overrides favorite (you don't see it or it's grayed out)
3. Neither applies and you see it as a normal post (favorite and ignore cancel each other out)

One option would be to give it a score, like +1 for each favourite and -1 for each ignored tag. If the total score is positive, highlight, if it is negative, grey out, of it is zero, show as normal.

Another option would be to use compatible styles (assuming an ignored tag does not hide the question completely). For example if the question were in greyscale when it has a hidden tag, you can still highlight a favourited tag. Mockup: the 'etymology' tag would be favourited.

Oh, I like that -- highlight the tag, not the whole post section.