Status update from @Tyriar:

• We started exploring this in March Tabs for integrated terminal #10546 (comment)
• April plan: Terminal tabs April plan #120241
• Tabs have landed in Insiders work in progress & call for feedback Tabs for integrated terminal #10546 (comment)
• Moved to backlog to cover terminals in editor area Tabs for integrated terminal #10546 (comment)
• Assigned to June for "terminal editors" Tabs for integrated terminal #10546 (comment)
• Terminal editors plan filled in (Terminal editors June plan #125514), request for feedback Tabs for integrated terminal #10546 (comment)

Feature request.

Default terminal

But could be more usable...