I just ran across an article on AppleInsider from a month ago. It had this section in it; note they spot the same issues:
Limitations and oddities with tabs
It's definitely brilliant when you can be at your Mac and open a tab you remember reading earlier on your iPad. It's just that it's less brilliant when you can't.
For some reason, iCloud tabs are inconsistent. At time of writing, for instance, we have a Mac where Safari is insisting that the associated iPhone 12 Pro has only two tabs open. In reality, it has seven.
Similarly, both the Mac and iOS device's iCloud tabs list include an option that in theory closes the tab on the other device. But it doesn't.
You should be able to open Safari tabs from your other devices right there on your Mac.
On the Mac, if you hover over another device's tab in the list, you get an X button. On the iOS device, swiping across the name of another device's tab gets you a red Close button.
In both cases, clicking the X or tapping Close will remove the tab from your list — and do nothing on the other device. It's not as if we're so tidy that we want to remotely clean up our Safari tabs on every Apple device we own, but it's peculiar how the option is there.
You may never notice it, you may never try it, and since it doesn't work anyway, you will never care that you can or can't close tabs on another device. Whereas the inconsistency between what tabs are really open on your iPhone and what your Mac thinks is open, that's more frustrating.
Nonetheless, iCloud tabs work often enough that they are useful. The ability to squeeze out and see previews of all the tabs in your Mac Safari's current window is excellent.