TMG has no method for transferring information in Flags to a Tag. It is possible to do that with John Cardinal's TMG Utility, but the process is pretty involved.
You use the Events > Add Events function in TMG Utility. That function requires that you create at text file that contains the ID# of each person for whom you want to add a Tag, and information about what is to go into each field of the Tags. Help for TMG Utility describes the format of this file.
You can create the basics of the file by using the List of People report in TMG, and carefully selecting the output to include the ID# of each person and the value of the Flag that you want to transfer, and sending the report to a word processor. You would then need to add additional data to the file to meet the formatting requirements. You can do that with the Search and Replace function of the word processor. Finally, after you have the file correctly formated, save it as a text file.
When you use TMG Utility make sure you have a good backup of your project and view the result in the "Log only" mode before you proceed, because it is possible to do major damage to your Project.