Bug
Actually have the same problem which is reproduced in this example
https://stackblitz.com/edit/angular-material2-issue-v5gpri?file=app%2Ftag.component.html
I using an autocomplete chips component. Try to put some letter in input and select one of the values. Note that input not clearing. I trying to reset this value manually and nothing helps.

Chrome, MacOS Sierra 10.12.6
Angular ^4.4.6
@angular/material ^2.0.0-beta.12
I'm not sure why this would be set to such a low priority. Through this bug, you cannot combine chip input with autocompletes :/
Edit: never mind. After a bit of testing I realized the obvious problem that although the input field is blanked, the autocomplete doesn't know about it and is still filtering on the old value.
@We-St You can work around the issue by changing:
(optionSelected)="add($event)"
To:
(optionSelected)="add($event); chipInput.value = ''"
After a bit of playing around I was able to get it working, however there does appear to be an issue where the formControl setValue is not updating the value displayed in the control:
https://stackblitz.com/edit/angular-material2-issue-wmgcaj
I was able to work around this by using both formControl.setVaue and input.value so both view and model were in sync.
Faced the same problem. After little investigation of source code, found that MatAutocompleteTrigger saves previous value.
Setting empty value and dispatching "input" event worked for me:
input.value = '';
input.dispatchEvent(new Event('input', {
'bubbles': true,
'cancelable': true,
}));
Revisiting old bugs- I think this one is obsolete. We have an example of this in our docs: https://material.angular.io/components/chips/examples#chips-autocomplete
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Most helpful comment
I'm not sure why this would be set to such a low priority. Through this bug, you cannot combine chip input with autocompletes :/