That certainly sounds exactly like my issue, but I don't know what you mean tagged. Is that a google thing or a UT thing? I did notice that when I logged into my google account that all my contacts are duplicated, so the sync is working. I haven't merged them because I suspect my contacts will disappear off my phone if I do that.
BTW, I've been using UT for a week now and I think I'll keep it for a while. I have some issues but no show stoppers.