Uninstall Notepad from Settings -> Apps and it reverts back to the original version without bloat or tabs.

I know that a system update might solve this problem, but this is really unbelievable. I thought Notepad should be something fundamental and solid—something that would never fail me on Windows.

Now it's not.

I don't see why notepad should've changed in the last 20 years

If I recall correctly Microsoft have always used Notepad as a test bed for new Windows APIs.