That's what I'm going to do in my website, but I'm not sure if things are like you are saying.
The first version of zenphoto I installed, a few years ago, was treating tags as atoms. I had a tag Young & Rubicam and even the "&" character was not a problem when you clicked on the tag.
I didn't notice the change in search engine when it happened, I don't even know which version of zenphoto included that change.
In many cases multi-word tags are more useful and intuitive for an average user if they are still treated as atoms, at least when you click on them.
But of course it's your choice, and I can live without multi-word tags