I just ran into an issue at a client site that was very puzzling. I happened to find the solution here while browsing for something else:
Essentially, the issue is that the documents were being tagged with managed metadata values by users that had contribute level access to the site, SharePoint was not returning any error message, ULS logs were also clear. The document properties would save and if the user went back to view the properties of the document, the values were blank.
The same exercise from a site collection administrator account did not behave like this.
The solution to this problem as described in the blog post was to add the NT AUTHORITYAuthenticated Users as read permission in the TaxonomyHiddenList.
The contributor level users were tagging the documents properly but when displaying the values, their account could not retrieve the list item in the hidden list hence the blank values.
Thank you Prashanth.