Just learned about Orion and was excited about having an improved alternative to Safari. Since I like having the Browser UI as compact as possible I naturally picked compact layout. Funnily enough, even before opening another tab I found it strange that the navbar is left aligned rather than centered, but I could not "fix" it by customising the toolbar. Since the default toolbar in that dialog gives the impression that it should be centered, I was thinking maybe it was a bug.
After eventually opening another tab I was pretty confused that adding another tab apparently seemed to add two new tabs, which to me is the most weired and unintutive part of the current compact layout (at least the first tab should be always shown from the start. Clicking a plus button on an empty space and then having two new elements appear instead of just one, really is a prime example of suprising the user and frankly feels like a bug. Especially if you do this on the startpage, there is really no way to tell that it is not a bug.)
It really took me suprisingly long to figure out what was going on and then I spent searching the settings twice to figure out the option to make the compact layout behave like safari and not just move the tab bar up in the toolbar (which I think is the right way to describe Orions "Compact" tab layout) and was suprised not to find one, which lead me here since I was curious to find the reason behind it.
After reading through the posts here, it feels like the most probable reason is that implementing the compact layout like Safari is just a lot more effort. And I can totally understand that the Devs want to safe themselves the effort, if it can be avoided. (And if it's not their preference anyway. Like many others here the given reasons, like HIG and the navbar being most important UI element, however don't convice me that it is a good choice regarding UI/UX design.)
While unfortunately Orion cannot be a Safari replacement for me (yet?), since I consider the current compact layout to be a degradation rather than an improvement, I may occasionally find a use for it and keep an eye on it’s development.
Meanwhile I would suggest a simple fix to avoid the bad initial UX I had as someone familar with Safari's compact layout (Which is likely going to be a very high percentage of Orion's target audience.): Just don't call it "Compact Tab Layout" and don't have the UI for selecing the setting even look exactly the same as in Safari. (This is clearly setting the wrong expectations) Instead just pick another name or even make it a simple option for the standard layout to move the tabbar up into the toolbar (Which actually is exactly what the current implementation is)
I hope this is helpful in some way.