Good find, I can confirm this behaviour.

I've been testing this occasionally, to see if it's fixed, and I noticed that it's inconsistent.
Usually, it inappropriately closes all tabs, but sometimes it only closes some (but not all) of them. Every once in a while (maybe 10% of the time), it works properly.
Also, I'm not sure if it's significant, but when it closes tabs, it also displays the "undo" popup briefly before exiting. That doesn't seem appropriate (and thus may be a clue).
I hope this helps the debugging.

96.0.4664.46

New symptom: sometimes, in addition to inappropriately closing all tabs, it also FCs instead of gracefully exiting. Not exactly an improvement.

Tested with 15.03.2023 dev version 111, bug still present. It's important to fix this in the coming update
Video of bug

What the hell Kiwi, I just lost all my tabs with no way to get them back! Losing data is a serious issue!

I was trying to simply close a tab. The three dots menu has no "close tab" option but it has an "exit" button that absolutely nukes everything. Why would you put such a land mine in the app... with no way to undo?

Also got this issue today. No way to recover almost 70 tabs...