If you open up the file (auto-tag/auto-tag.class.php) and go to line 83 you’ll find this line:
if(strpos(strtolower($tag), strtolower($forbid))!==false)
Change it to this:
if(!empty($forbid) && strpos(strtolower($tag), strtolower($forbid))!==false)
And it will work again.