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The Australis inactive tabs don't overlay. Take a look at the mockups. Only the active tab has a background and border styling.

Chrome stacks away from the currently focused tab. If tab 6 of 10 is focused, 6 will be in front of 7, which is in front of 8, and so on; similarly 6 is in front of 5 which is in front 4, and so on. There is a subtle visual lead to the focused tab. If you then select tab 2 for example, tabs 3 to 6 will be restacked for consistency.

I loathe that behaviour, it was one of the things that bugged me about Chrome. If I close a tab, I want the focus to go back to the previously viewed tab, not the previous tab in the z-stack.

You are assuming tabs are a stack. They aren't.