Except if the airport has a baggage handler involved somewhere in the baggage handling process, they can't read the barcodes but can colour and text identify the bag priority. Lack of tag might cause them to think a system error occurred, and then the bag is manually relocated to low priority bins. Airlines could probably save a respectable amount on not using priority tags if the information is hardcoded, so if they are still being issued then that suggests the tags still serve a useful purpose.