Not an issue of spaces per se but with >1000 rooms/DMs, the Element Desktop UI can become very unresponsive, to the point of being barely usable, and sometimes freezes completely requiring killing the process. I haven't pinpointed the exact condition(s) that makes it freeze up/get very sluggish but even on good days it takes >5s to expand the "People" list.

This is on a modern desktop CPU with plenty of memory headroom. It never happened so far on a profile with less chats.

When I tried it (when it had just freshly come out) I wasn't able to group channels of each bridge in their own space. Perhaps that's changed now as I hid the whole spaces tab when I first tried it and didn't try it again.

Tbh tags were fine, it was just the whole UI around it in Element that was just totally screwy. But the concept itself works ok (though I missed the ability to auto assign them based on the bridge).