For example, /execute if entity @e[tag="Test Tag"] returns an "expected end of options" error.

This is inconsistent, as entities themselves can indeed support tags with spaces.

How to reproduce

1. /summon minecraft:creeper ~ ~ ~ {Tags:["hi there"]}
   

2. Try the following

   /execute if entity @e[type=creeper,tag=hi there]
   /execute if entity @e[type=creeper,tag="hi there"]
   

   /tag @e[type=creeper] remove hi there
   /tag @e[type=creeper] remove "hi there"
   

   Note: The first /tag variant is even suggested by the command syntax help
   None of these commands is considered valid