Instagram has always limited the bio field on your profile quite strictly. However, today, they're allowing full linked support for hashtags and profile links in your bio. But what does this actually mean?
Instagram still won't link website links (you'll have to stick the one-link allotment in the "Website" section of your profile if you want a clickable link to show up), but hashtags (with #) and links to other accounts' profiles (with @) will now automatically and appropriately link to the proper places.
How much this actually helps your engagement and/or reach is still very unclear. On one hand, having your profile integrated with the proper and relevant hashtags could help people understand the scope of your business. Perhaps linking to a personal profile from your business' profile (and/or vice versa) could help cross-pollinate your followers between the two.
But you also run the risk of giving users one more rabbit hole to jump down before potentially scrolling down to see more of the content you have to offer. So using this feature is not something that's necessarily guaranteed to actually help your page; and we don't yet know if Instagram's algorithms favor hashtag or outside profile inclusion of any kind.
For those who are tagged on another account's profile page, a standard tag notification will let them know and simultaneously give them the option to remove the tag.
What do you think of the changes? Is this something you've been wanting for a while?