Tags are applied to Products in Point of Sale and processed and filtered out of the Tags sent to Shopify. They work whether or not the Update Tags setting is On or Off.
The "instock" Tag allows Shoppers to always order a product, no matter how much inventory you actually have in stock. This is great for products that sell in high volume and are easy to get or that you order frequently. When applied, "instock" triggers the "Continue selling when out of stock" checkbox on the corresponding Variant in Shopify to be checked.
The instock tag applies only to Products that are Single Products or Products that are part of a Matrix in Point of Sale (products that are linked to Shopify Variants).