If a player gets tagged they can be traded, if the team that wants them can workout a deal with the tagged player and the team that tagged him.
If the player signs the tag offer the compensation to the player would be the average of the top 5 highest players at his spot. The team would get a first round pick if the player just signs with another team.
The team that tags a player must have the cap room available to cover the price of the tag until its signed or removed. A team can remove the tag at anytime and the player as until week 10 to sign the tag, he can't play until he signs.
Players hit free agency to get paid, the only money thy know that'll get is the bonus money, the tag is strictly base salary and it's a one year deal.
Once a free agent is tagged he no longer is a free agent because the team that tagged him will be expecting compensation.
If the tag is removed then the player is a true free agent again.