Actually you can't just hit Tab. That brings up the options that actually use a dip switch on the main NEO-GEO PCB. Pressing the Service button will bring up a list of options that can be changed in the software itself. It's kind of like an options screen in a console game.
Step-by-step blood:
1. Press the service switch (F2 by default in MAME)
2. Use the joystick/arrow keys to move through the options. Button 1 selects options, Button 3 backs up a level.
3. From the service menu select "SETTING UP THE SOFT DIP"
4. Select "SLOT1 METAL SLUG"
5. Select the BLOOD option and press button 1 to cycle through.
6. Press button 3 to back out to the main service menu and select EXIT. The game will restart with the new options enabled.
You can also set options like 99 lives from this menu. You can even set the game to display Portugese as the language

All NEO-GEO games have this menu. For that matter, most games made after 1988 or so use some type of a software setup.