I am trying to add user by @
but the user profiles which could earlier be tagged are not showing up anymore
Is this functionality no longer available or a bug ?
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Not a bug, the whole @mention functionality is missing.
There is an idea to reintroduce the functionality: https://ideas.sap.com/D37902.
If SAP agrees to re-implement it, then maybe they will use a similar concept to the one, which you describe.