Well it should be noted that this is the back up design. The original design, which is now buried as a option that no one will ever use, is the Compact tabs design. I firmly believe the entire Safari 15 redesign revolved around this new concept. But they caved to whining early in the beta, and came out with this much worse option which was less different than Safari 14, and made it the default. That was the mistake.
I am still using the Compact tab UI because it is better than this one. It has its own drawbacks but its better than what they went with as the default.