There doesn't seem to be any requirements for this. Just open enough tabs to have the existing tabs sufficiently squished, which starts to happen when the window has a total of 6 tabs. I believe the issue stems from a tab while before the previews tab open animation finishes.
the other tabs have to have their titles truncated due to lack of space, and it isn't properly handled because another tab open event seems to interrupt it.l
this is made a little bit clearer with this video, where I open tabs at a slower rate
Additionally, this issue is resolved when focus is lost on that window, by clicking on another app (Finder in the video), or another window in Orion (not shown)
Sometimes, it's not that noticeable. But, notice how tabs 1 and 2 have the full tab title present, but tab 3-5 only have the ...

It seems like any combination of these settings still result in this bug
