I don't know the details of Taro yet, but looking at the image below, this appears to turn each node operator with differing assets on their channels into a micro-exchange.
The difference between an exchange and a Taro node, is the node operator personally owns the asset amounts on their side of the channels at any time. Anyone that transacts through their node between differing assets are conducting transactions on behalf of the operator, and thus turns them into a middle-man that would then be subject to capital gains each time a non-btc asset is moved through their node.
The Taro node operator is also subject to swings in the market, and could easily be used by other nodes to ride out swings in the market to their detriment. You become a market-maker between the assets on your channels and subject to having your node's total value capacity eroded by any other Taro node on the network even if you-yourself aren't conducting any transactions through your node.
For example Bob could move their bitcoin asset over to Carol, and hold dollars before bitcoin drops in dollar price. Then before bitcoin rises again in price, Bob could buy back their bitcoin for dollars from Carol. Because the exchange rate changes throughout the day, these transactions could happen several times per day and Carol's total assets driven to next to nothing.
Sure Carol could claim a capitol-gains loss on her taxes, and she would be required to do so, but how is that a proportional consolation?
What am I missing here?