I don't know anything about UI/UX design, so just an anecdotal feedback about my experience with this:
I like compact mode because I'm using this on a smaller sized Macbook 13". As such, I want as much screen real estate as possible. I have compact + mini toolbar turned on just because I want to min-max space WITHOUT going into fullscreen. Orion has one of the slimmest design for toolbars currently, which I am grateful for.
But sometimes I go into split screen to take down notes, Orion on left half and maybe a Doc on the right.
It is so incredibly hard to navigate through my tabs with that gigantic address bar. This is what it looks like 
See how small the tab navigation area becomes? This is only with 3 tabs open. I can't even see which tabs are before and after this one to effectively use keyboard tab navigation.
I rarely need a dedicated address bar--in fact, I never ever do. Maybe power users might need it, I don't know. But Safari's compact tab design works really well for most people's needs, under most circumstances. Can't say the same in this particular case.