MacOS Mojave, 10.14.3. Cannot rename Folder Tags

You rename Finder tags in Finder Preferences : Tags panel by double-clicking the tag name and changing it there. Then, right-click on the folder with the old tag name, and select Tags… from the secondary menu. Click behind the old tag badge, and then back-space to remove the old tag name. Select the new tag name from the available list in this window, and then press return to set that new tag on the folder.

This process should be easier, but isn't.

1. See if relaunching the Finder fixes it. Press the option key then right/control click on the Finder icon in the Dock, choose "Relaunch".
2. See if it works when logged into a different user account. If so, you probably need to create a new Finder .plist. Delete

~/Library/Preferences/com.apple.finder.plist

You will have to reset your Finder settings.

FWIW, I thought you meant you can't rename tags in Finder preferences. If not, ignore my comment.

Just to add, to change a file/folder tag, I find it easier to right click on the file/folder, uncheck the current tag, then repeat the process, marking the tag you want.