We tried to call SetFriendTags on the server API with an empty array, but it does not delete all friend tags, but does indeed nothing. Below you can find the code we used for testing. We do now detect whether all tags should be deleted and then we set the tag "EMPTY" to remove all tags, but the new empty tag.
export function SetFriendTags(localPlayerPlayFabId: string, friendPlayFabId: string, tags: string[]) { if (tags.length === 0) { tags = ["EMPTY"]; } server.SetFriendTags({ FriendPlayFabId: friendPlayFabId, PlayFabId: localPlayerPlayFabId, Tags: tags }) }