Follow the link for images of the old vs new tab design, as well as the Settings interface for switching between them.
I do appreciate the new setting, which separates the issue of the all in one address bar from the design of the tabs themselves. Here are some thoughts on the tab design:
The rounded rects feel retro, outdated. The tabs feel like blobs, floating in space. An individual tab does not feel strongly rooted to the page below it. If you have multiple tabs open, it’s not immediately clear which tab is connected to the page below it.
The current tab is marked by a different shade. Unfortunately, this effect is subtle, not at all obvious-at-a-glance. All of these point combine to make it difficult to get a sense of where you are (which tab is active) and where to tap to make changes.
Beyond this are some behavioral issues, which I see more as tweakable beta issues, not foundational design problems. When I tap on a non-active tab to switch to it, the destination tab is selected, and then, after a slight pause, the tab layout changes. This comes up consistently when I try to select a background tab to close it. I tap the tab, then head to the close “x” to tap on it. By the time I get to it, the tab layout has changed just enough for me to miss and cause another tab to come to the front.
There are other tweaky behavioral issues, but I think if the iPadOS Safari team can address the tab design issues, the rest will sort itself out over time.
My two cents.