Will a T7 tag still work if it is placed next to a start codon? Meaning, will it still work with a Met attached to it in the amino acid sequence?
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By "still work" I assume you are asking if it will still be recognized by an antibody? It might. Internal T7 tag fusions are done, though they may require different antibodies than terminally tagged fusions.
That said, do you have a reason for inserting the the tag after methionine? The T7 tag already starts with methionine and naturally functions to initiate translation of T7 gene10. pET based vectors also contain it for this purpose.
In this vector, your gene of interest is typically inserted after the tag to create a fusion protein (using BamHI) or immediately after the start codon (using NheI). In either case, the T7 tag start codon is used.