"Combine if possible" doesn't solve the problem at all except in some very specific cases.
Some further investigation. If you use a couple of standard app windows like Notepad, it's not a problem.
But if, however, you use windows from an Electron app, or group some Edge Chromium Windows or some modern Windows applications, the tabs will still be above the designated line in FancyZones or Display Fusion when the split is not the top split.