Sounds like a great idea, but with numerous problems that need to be first addressed.
I am assuming that even players who don't hold the flags can have their tags taken? If that is the case then it could work out, but if not then you'll probably see people camping at their opponents' flags to make sure it is impossible for flag-bearers to return.

There are also problems with people cheating by hiding their tags and pretending not to be involved as well as how administrators/staff are supposed to know whether you have a tag or not - i.e., someone could hide their tag then ask for a new one claiming there's has been taken by the opposing team. They now have 2; once one is taken they can easily bring up their second one and keep playing without having to return.

Plus as you have mentioned there are definitely OH&S issues involved. Just imagine a game of Oz Tag where people will jump to the side to avoid their tags getting ripped off, or try to run around opponents concentrating their eyes on the opponents' hands and their tags rather than those around them. Bumping, collisions and tripping result.

So I believe it would be a good idea, if only the problems above are first addressed. You could always find a space outside or in an open area to do this. If there are large areas open in the Sydney Convention Center then perhaps they can be dedicated to a series of events such as Cosplay Capture the Flag. However, I am sure the convention management probably does not allow running in the halls.
(perhaps sit up an area outside of the convention; that may work)

I thinking perhaps that maybe an outside venue would be best for a game like this, since like you said, running probably isn't allowed in the convention center and it would pose a hazard to other con-goers.

Camping tactics may not work, as you can also have your tag taken even if you're no holding the flag.

As for cheating...I'm not entire sure how to address those issues. As for hiding flags or tags, perhaps participants must turn in all belongings (for safe-keeping) and articles of clothing that can hide them. (such as bags, jackets, detached sleeves, and maybe hats) I'm thinking maybe there could be people acting as referees (Identified by a unique armband) to patrol the game, or be stationed at certain points to check if players are hiding tags, or the flag. That would probably disrupt the game too much, though