TLDR; Feature was removed
The OP followed my suggestion in idea #4 and followed up on the iterm2's forums on Google Group. He asked his question there: Open windows as "tab groups".
A dev answered his inquiry there:
That was a bug which was out for a version or two a year ago when
macOS added support for native tabs. It kind of sort of works but it
has a lot of rough edges so it got disabled. Amusingly, Apple even
tried to disable it for iTerm2 but it doesn't seem to have worked.
Idea #1 - iterm preferences
If you go into iterm2's preferences under the Profiles tab (red #1 below) is another group of tabs. If you select the Window sub-tab (red #2 below) there's a check box that sounds like what you're looking for.
Open Preference Dialog
Idea #2 - Panes
Upon further researching this I can only conclude that what you're referring to as "windows" in your example are in fact panes. Here's an example where I've setup 3 panes with tabs underneath them.
Panes show up when you either vertically or horizontally split a tab. They're mentioned here in the iterm2 documentation. They're accessible when you right click on a tab and then split it:
You can also create panes with the keyboard shortcuts:
- (Vertically split) - ⌘ + D
- (Horizontally split) - ⌘ + shift + D
I haven't been able to substantiate this but I wonder if Iterm2 was utilizing this property of the Dock in previous versions and then dropped it? When this option is set in the Dock to "Always" applications such as Finder and TextEdit will open new documents within a tab vs. a new window even when the "new window" option is selected within the application.
Option in Docker
Example of TextEdit tabs
Idea #4 - open a ticket with iterm2 upstream
If neither of the above shakes anything out you can always try opening a ticket with Iterm2 on their Gitlab page or ask this question in their support forums.
There's also the Github which appears to be just code, no issues: