Plugin development, hooks, generate content

I see a problem in the register_taxonomy function. The second argument that you are using is:

array ( 0 => 'frontiles' )

But it should be:

array ( 'frontiles' )

Or, as you are passing only one CPT, it could be also a string:

'frontiles'

Also, you are executing insert_term() in every page load but in your code I see that always is the same term inserted. Once the term was created the first time, there is no reason to repeat that process in every page load. I suggest to remove add_action('init','insert_term'); and execute insert_term() on the registration action hook right before wp_insert_post.

Also, because you want to insert a term and create posts during activation, you have to register the custom post type and taxonomy also in the register_activation_hook, not only at init. That is beacuse the next init event ocurrs when the plugin is still inactive. I’ve build this plugin with your code and my suggestions and it works:

<?php  
/* 
Plugin Name: Test
Plugin URI: http://wordpress.stackexchange.com/questions/172888/plugin-development-hooks-generate-content
Version: 1.0
Author: CybMeta
Description: Test
*/ 

// Custom Post Type Front tiles
add_action('init', 'cptui_register_my_cpt_frontiles');
function cptui_register_my_cpt_frontiles() {
    register_post_type('frontiles', array(
        'label' => 'Tiles',
        'description' => 'Create tiled elements for the front page.',
        'public' => true,
        'show_ui' => true,
        'show_in_menu' => true,
        'capability_type' => 'post',
        'map_meta_cap' => true,
        'hierarchical' => false,
        'rewrite' => array('slug' => 'tiles', 'with_front' => true),
        'query_var' => true,
        'exclude_from_search' => true,
        'menu_position' => 3,
        'supports' => array('title','editor','excerpt','thumbnail'),
        'taxonomies' => array('tiles_categories'),
        'labels' => array (
            'name' => 'Tiles',
            'singular_name' => 'Tile',
            'menu_name' => 'Tiles Posts',
            'add_new' => 'Add Tile',
            'add_new_item' => 'Add New Tile',
            'edit' => 'Edit',
            'edit_item' => 'Edit Tile',
            'new_item' => 'New Tile',
            'view' => 'View Tile',
            'view_item' => 'View Tile',
            'search_items' => 'Search Tiles',
            'not_found' => 'No Front Tiles Found',
            'not_found_in_trash' => 'No Front Tiles Found in Trash',
            'parent' => 'Parent Tile',
        )
    ) );
}

// Taxonomies Front tiles
add_action('init', 'cptui_register_my_taxes_tiles_categories');
function cptui_register_my_taxes_tiles_categories() {
    register_taxonomy( 'tiles_categories',array (
            'frontiles'
        ),
        array( 'hierarchical' => true,
            'label' => 'Tile Categories',
            'show_ui' => true,
            'query_var' => true,
            'show_admin_column' => true,
            'labels' => array (
                'search_items' => 'Search Tile Categories',
                'popular_items' => '',
                'all_items' => 'All Categories',
                'parent_item' => 'Parent Tile Category',
                'parent_item_colon' => 'Parent Tile Category',
                'edit_item' => 'Edit Tile Category',
                'update_item' => 'Update Tile Category',
                'add_new_item' => 'Add Tile Category',
                'new_item_name' => 'New Tile Category',
                'separate_items_with_commas' => 'Separate tile categories with commas',
                'add_or_remove_items' => 'Add Categories...',
                'choose_from_most_used' => 'Choose from the most used Tiles Categories',
            )
    ) ); 
}

////////////// Add term "mosaic-home" to custom taxonomy "tiles_categories"
function insert_term() {
    wp_insert_term(
     'Mosaic - Home',
     'tiles_categories',
      array(
          'description' => 'Add Tiles here to load in first term'
        )
      );
}

function create_frontles_posts() {

    cptui_register_my_cpt_frontiles();
    cptui_register_my_taxes_tiles_categories();
    insert_term();

    $x = 1;

    do {
        $post_id = wp_insert_post(array(
            'comment_status'  =>  'closed',
            'ping_status'   =>  'closed',
            'post_author'   =>  1,
            'post_name'   =>  'tile'.$x,
            'post_title'    =>  'Tile',
            'post_status'   =>  'publish',
            'post_type'   =>  'frontiles',
      ));
     $term_taxonomy_ids = wp_set_object_terms( $post_id, array('mosaic-home'), 'tiles_categories' );

      $x++;
    } while ($x <= 24);
}
register_activation_hook( __FILE__, 'create_frontles_posts' );