He uses the word "tap" twice. By definition, a tap is a lowering of wire size relative to the OCPD. Of course he may have been using "tap" in the general sense of just "splicing". He did say "for distance" but he also mentioned multiple outlets so it could be reasonable to asssume that he wants more than 20 amps.
NEC does not have a definition for the word "tap". In 240.21 NEC does use the words "branch circuit tap conductors" and "feeder taps", but doesn't give a specific definition for those terms, though the sections those terms are used in do kind of describe each situation fairly well. I think most any place else in the code that deals with such situations does reference 240.21 and requires that situation to also comply with 240.21.
Otherwise just field talk and the word "tap" can be confusing at times to what the intent was of the person that used that term.
Webster-Merriam online dictionary gives us this definition for tap as it relates to electrical applications:
"an intermediate point in an electric circuit where a connection may be made"
so without any other context as is in 240.21 any junction point could be considered a tap whether there is a change in conductor size or not.
He made me replace the oversized run, put in to reduce VD, with same #12. Actually it made sense to me; no telling if someday someone else just opened the breaker box and saw #8 on 20 amp breaker and assumed they could replace it with 40 amp; maybe I should have been allowed to make a note there was #12 downstream; but a note could fall off? Maybe he had OCPD too (Obsessive-compulsive personality disorder). Seems only proper way for OP is to put 20a protection devices at the end of #8 run.
There is no requirement to tag or otherwise identify such oversized conductors though nothing prohibits that either, your inspector needs to pull his head out of the sand, voltage drop is a real world problem and over sizing conductors is a way to deal with it.
If I wanted I can put 500 kcmil copper on a 15 amp overcurrent device and the only way it violates code is if I try to land it directly on a device that wasn't designed to accept that size of conductor (which would be typical for a 15 amp device)
I dont see any branch circuit tap rule applying here, so you would either need to provide OCP for the 12's at the split, or OCP the whole mess at the #12 ampacity.
