@SujinaSJ-1789 Welcome to Microsoft Q & A Community Forum. When mode property is set to indexed, it evaluates all the resource types which supports tags which you are already aware of. Kindly note that publicIPAddresses does support tags. For more information on list of resource types that support tags, refer this document.
As you mentioned that your azure policy is denying the creation of resource types that doesn't support tags. Can you please share the resource type for which you are facing issue with? Also, if you are unable to deploy publicIPAddresses, I assume that this might be related to another policy within your subscription.
To troubleshoot the creation of resource being denied by policy, you can check below image for resolution. For more information, refer this document.