Why is there a limit on 5 tags in the first place? Is it to prevent cluttering? Technical reasons? Was it as simple as a pragmatic choice by the programmer?

UI considerations were part of it. We asked ourselves: what do we need to do to support a reasonable display of all the tags (on a post and in the post list) including on phones? Having some limit made sense. From there, I think we just went with something that seemed to work Somewhere Else. I agree we should revisit all this, bearing in mind that if we allow a lot more tags, we'll need to also think about displaying them -- display all, display the first N (chosen how?) with "..." or similar, something else?

Somewhere Else stacks them twice; first horizontally, then vertically. That seems perfect to me, unless we’re permitting 20+ tags.