Hm, that's weird... it's working on all our systems here. Spent some extra time to make sure.
What Mac are you using, and what's the build number of your macOS?
I know one thing is that it won't work if you have the Library window in focus because the VM windows and the Library windows are of a different class.
(but you just click one of the VM windows and the options are no longer grey)
macOS Sierra build number is 16A319. Library window is closed. Right now, the only open VM is my Windows 10 Pro Anniversary. View menu shows a greyed (and ticked) "Show Tab Bar", but no tab bar can be seen. The Window options (Show Previous Tab, Show Next Tab, Move Tab to New Window and Merge All Windows) are all greyed out. This machine is a Mac Pro 5,1.
I've just quitted Fusion 8.5 and restarted. Upon restart, only one thing had changed: "Show Tab Bar" was neither ticked nor greyed out. I was able to select it and then a tab bar with "Windows 10" appeared. Then I opened a second virtual machine (a virtual Sierra) and this time I was finally able to Merge All Windows). So, this is one procedure to restore "normal" behaviour. I'm not sure how to make it fail again. Perhaps you'll figure out a more fool-proof method for a coming update.
Many thanks for an overall wonderful upgrade.
Interesting behaviour for sure... I couldn't reproduce it with my build (16A320) The way I use it is to just open the other windows up and then do Window > Merge all windows
Oh and you can also drag the tab bar onto the other one when you do View > Show Tab Bar.
Yes, many thanks. I had noticed that back in 8.1.1 before tabs disappeared for no known reason. I don't know how to make them disappear again. I guess we'll figure it out soon enough. For now, my question might perhaps be considered answered, sort of.