I see people put tags in the alt text and have done that as well at times. Should that be avoided? I am very unfamiliar with tagging etiquette

Definitely avoided, it's not searched or indexed for that purpose even on sites that actively use hashtags!

Alt text is used to describe the image to visually impaired people. Tagging someone or something isn't helpful to those people. If you need to credit someone, add it without the main post.