The Tag Formatter plugin provides customizable options to change the display of tags in Obsidian's preview mode. It offers several features for improving tag visibility, such as hiding the '#' symbol on tags, concealing parent tags in nested structures, and even hiding specific portions of tags based on defined patterns. Users can further personalize their tag presentation by applying CSS classes to individual tags or based on their parent tags. These customization options allow users to streamline the appearance of their notes and make tag management more efficient.