When acid value increases pump seals, o-rings in the fuel injection system, filters get affected. This also increases unsaturation in the fatty acid composition and chokes the injector nozzles.
Every engine manufacturer sets his own specification on the type of fuels and lubes that can be used. There are rules framed like in Maritime applications (by IMO) that the fuels should be free of inorganic acids. This is something to do with the health of the crew. Further if you refer some international standards like the EN 14214:2003 standard for bio-diesels, the maximum acidity specified is 0.5 mg KOH/g. While that of crude liquid bio fuels is 15mg KOH/g. The acidity is more important as to the suitability for the engine considering the type of materials used in the fuel systems, combustion and exhaust components and exhaust heat recovery units.
The conclusion is TAN is mere acceptance to the engine hence quoted as maximum mg KOH/g.