Tagged means that the ethernet frames will have 802.1Q VLAN tagging. You may have noticed that when you tick tagging, you can then select multiple VLANs on the interface. If tagging is off there can only be one VLAN on the interface.

If you turn on tagging on the Internet interface the upstream modem probably won't understand the VLAN tagged packets.

The only devices that normally expect VLAN tagging are links between switches, and sometimes the link between a switch and a router.