the search query "#web application" doesn't work. '#"web application"' also doesn't work. Clicking on the tag which does a search doesn't work either.
In quick search, using '#tag' implies you want to look for a tag called 'tag'. We've improved the search a little in the last few days. Have a look at the latest and see if that does what you want.
Searching for "#web application" should find all items tagged with 'web' that also have 'application' in the title somewhere. So this feature is working as expected :) For now at least, the new advanced search will allow you to search for tags with spaces.