A lot of my tags, for instant, include first and last names together. I feel like a moron for asking this but, since spaces are considered separators, what character would I put in between the words to create a tag using 2 words?
If you use a space, the algorithm will still treat the tag as any other string. You can put there whatever you like, just make sure that the tag (or a related word) occurs in your posts in order to be added.
Also, please explain the option of: "How should APT recognize words?" What if it is left blank? Should I restore the ones you already had listed in the default settings if I don't know what I'm doing?
These characters are used to find tags or related words. APT basically looks for something like this:
$any_separator . $word . $any_separator
If you delete all of them then the script will be slightly faster but then only substrings surrounded by spaces will be considered as words. You should check the option "Replace non-alphanumeric characters with spaces" to ensure that every user-defined tag will be added to a post. Or you can just restore original separators.
Hope that helps. :)