When TDT finds a file or folder name with more than 52 characters – and the name truncation (the Options|Name Truncation sub-menu) is anything other than None – it will attempt to rename the file/folder. The tags are not used or affected by this, only the file/folder name is altered/used. To rename files based on the tag information, click on the Edit|Rename Files From Tags menu item.
If Simple or Middle truncation is switched on then the name is simply shortened to 52 characters (either from the middle or end of the name) and if this doesn't clash with any other name (i.e. there is not another file/folder with this truncated name) then the truncated name is used. If a file with the same name as the truncated name already exists, TDT will add a -NNNN suffix to the new name (where NNNN is a unique number) to create a unique file name.
If Cut At Word End is switched on (and you've selected Simple truncation) the program will attempt to truncate names at the end of a word. Word boundaries are assumed to be either spaces or underscores.
With Spaces truncation, TDT will try removing all space characters from the name. If this is still too long, TDT will truncate the spaceless name and add a -NNNN suffix to it, if required, to avoid clashing with other existing file/folder names.