Automator "Find Label Items" replaces existing Tags (via Shortcuts)

I tried this and for me it is adding the assigned tag, and keeping all other tags intact. That works from the contextual menu, and with a keyboard shortcut as well...

Try restarting your mac, and see if it works after that.

If not, you may also try deleting Finder preferences to see if that helps.

In Finder, press Command-Shift-G and paste

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

Drag the file to the trash (don't empty it just yet).

Press Command-Option-Escape, select the Finder in the list, and click Relaunch.

Then try your workflow again.

The Automator Label Finder Items isn't particularly smart about labeling files. Six years ago, I wrote an AppleScript that allows one to select one or more files in a file chooser, then add or remove one or more tags, as well as clear all tags from the file. Just tested this script on macOS Monterey 12.6 and it works fine.

I had a variation of this script that worked not only with the basic tags provided by macOS, but all custom tag names created by the user. With Monterey, Apple has hidden or entirely removed the accessible .plist where these custom tag names were stored in prior operating systems.

Here is another idea, which may or may not help: instead of making these applications, you could make them "Quick Actions" (aka "Services"). While I don't see how that would change the outcome, it does seem more natural - and that is how I actually tested it.

Strange indeed...