They're simple toys
Babies like the tags on their clothes and stuffed toys because the tags are easy to play with, grab onto, and chew on.
The tags are soft, and the fabric or stuffed animal the tags are attached to are also soft and cuddly. Parents don't worry about babies chewing on tags, so babies don't get into trouble with tags (compared to chewing on something dangerous). Be sure tags can't detach and choke!