The answer I accepted by @Alper,is the best workaround so far. I call it a workaround, because there is buggy behavior bug as of Big Sur 11.6. By changing prefer tabs to never, it breaks the configuration I liked for Safari where I do prefer new tabs.
These are the problem areas:
General System Preferences → Prefer Tabs, "always"
Keyboard System Preferences → Shortcuts
"Prefer Tabs always" has the following associated misbehaviors, and I've filed feedback with Apple about it:
Shell → New Window → New Window with Profile no longer works. It opens a new tab instead of window, even if that menu item is explicitly selected with mouse or trackpad. Assigning a shortcut to it doesn't fix that (i.e.
Keyboard System Preferences → Shortcuts). That's a bug.
By accident I discovered
Terminal.app does open a new window. However, defying precedent, there is no corresponding menu item with
Option-⌘N assigned to it, whereas hotkeys generally correspond to menu items. The only menu option that says it can create a new window (per issue 1 above), does the wrong thing, and isn't even associated with
Option-⌘N, which creates a new window.
⌘N creates new tabs (in aforementioned scenario), the new tab created shrinks all the existing tabbed panes down to the default size of the new window! That really disrupts the workflow, since I don't want to resize the other tab, which may have corresponded to big windows. That weird tab-resizing behavior doesn't seem to occur with
⌘T which is the standard menu item to create a new tab.