Looking at the source code I can see that the SQL is filtering out all tags with no posts, that's why it isn't working. By moving the WHERE into the LEFT JOIN it seems to fix it. I changed the file sql/update_all_data.sql to this:
UPDATE [PREFIX]tags tags,
(
SELECT
a.tag_id as tag_id,
a.discussion_count as discussion_count,
a.post_count as post_count,
b.last_posted_discussion_id as last_posted_discussion_id,
b.last_posted_at as last_posted_at
FROM (
SELECT
t.id as tag_id,
count(td.discussion_id) as discussion_count,
COALESCE(sum(d.comment_count), 0) as post_count,
MAX(d.last_posted_at) as max_last_posted_at
FROM [PREFIX]tags t
LEFT JOIN [PREFIX]discussion_tag td ON t.id = td.tag_id
LEFT JOIN [PREFIX]discussions d ON td.discussion_id = d.id
AND d.is_private = FALSE AND d.hidden_at IS NULL # Moved this line here instead of in a WHERE
GROUP BY
t.id
) AS a
LEFT JOIN (
SELECT
d.id as last_posted_discussion_id,
d.last_posted_at as last_posted_at,
td.tag_id
FROM [PREFIX]discussions d
LEFT JOIN [PREFIX]discussion_tag td on d.id = td.discussion_id
WHERE
d.is_private = FALSE
AND d.hidden_at IS NULL
) as b ON a.max_last_posted_at = b.last_posted_at
AND a.tag_id = b.tag_id
) AS source
SET
tags.discussion_count = source.discussion_count,
tags.post_count = source.post_count,
tags.last_posted_at = source.last_posted_at,
tags.last_posted_discussion_id = source.last_posted_discussion_id
WHERE
tags.id = source.tag_id;
