I noticed that when you add a keyword such as "hat" or "cap" to your keyword list, it'll add those tags to your posts if it finds words like "That" or "capped" in the post. The plugin seems to be tagging keywords that are within words.
Also, it tags words that have a hyphen. such as if you have the keyword "tie" in your keyword list, it'll add the tag to the posts with words like "tie-dye" or "tie-down".