I think Oregon has it right on party apps- no limit on number of members, but they do not break up the party or add additional tags. If there aren't enough tags available at the time the app number comes up, the entire application is unsuccessful and it's on to the next app in line until the issued tag number is met. Idaho caps it at 4 members, but they will add tags to fill an app if necessary.
If they limit it to 4, your not talking about much tag addition. At max it’s 3 more tags than the set quota. I don’t think that is worth changing it up.
Now, when there’s no limit to the members, yes it then makes sense to set it up like that. If not, you could essentially rig the system, every single person just apply as one group, then everyone would get tags.
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