Kinda tricky to explain, and only becomes a problem when you have a lot of tabs open (or, more correctly, when the width of the active tab in the tab bar is larger than the width of inactive tabs).
Say you've got some tabs open and you want to move Tab3 to be between Tab4 and Tab5.
Tab1 | Tab2 | Tab3 | Tab4 | Tab5
You click and drag Tab3 and move the cursor to the right. At some point, Tab4 visually jumps to the left of Tab3 and at that point, if you drop Tab3, it slots in between Tab4 and Tab5.
The problem is that Tab4 will only jump to the left of Tab3 when the cursor moves past the left edge of Tab4. When you let go of Tab3, where it will end up is dependent not on the position of the tab UI element itself but the cursor position.
When the active tab width is less than or equal to the inactive tab width, this isn't ever really a problem, because the visuals always clearly indicate where the tab will be slotted in.
But when the active tab width is greater than the inactive tab width, it is possible for Tab3 to fully obscure the Tab4 and for the cursor to still be to the left of Tab4's left edge. This creates a confusing situation in which the tab is dropped and it ends up one slot off from where it was intended to be.
The expected behaviour is that Tab4 jumps to the left of Tab3 when the right edge of Tab3 moves past the midpoint of Tab4. The end position of Tab3 would always be clear if this was the behaviour.
The same behaviour occurs when moving a tab to the left, just reverse all the directions and stuff in the example.
Here is a video, which probably is far clearer than my elaborate explanation:
All that said, the behaviour is the same in Safari. I figured I would report here in case this is related to Orion's implementation, but I will also report to webkit.