Issues when group tag and ordinary tag with the same name exist

If an item is untagged, an ordinary tag will take precedence over a group tag when applying tags, e.g., via the Tag bar.
However, if an item was already in a group and inherited the group tag, you can still apply the ordinary tag.

So, I’d say yes it’s behaving as expected.

And again, redundancy is not recommended, especially as it’s trivial to modify one of the tags to make it unique.