MacOS – Why CMD+N opened new popup Terminal window doesn’t follow the default preference

• CMD+n opens a new terminal window.
• CMD+t opens a new terminal tab.
• If you want to open something other than the default Terminal, use the techniques here to open a pre-defined Terminal setup. You can also do CMD+n,i,Tab to bring up the Inspector, then use up/down arrows, or type the names, which lets you choose a pre-defined Terminal.
• If you want a setup hard-coded and not yet known to Terminal.app, follow these instructions.

To the original poster, you weren't doing anything wrong.

Whether it was intended as a feature or not, it is clearly a usability issue, aka a bug. The problem is that often the affected app window was left stacked on top of all other windows, not behind them. Upon switching back and forth with Spaces Mission Control, the app often gets stuck under other open windows.

The finger-twisting CMD-TAB-OPTION-release fails more often than not: it either doesn't do anything differently or it is impossible to accomplish due to autorepeating keys, making it a worthless gesture.

It is definitely a bug, not a feature. Keep flipping back and forth with CMD-TAB, and the window will pop back to the top, then drop down again, erratically.

Oh, it doesn't appear to affect Spaces, so it seems to be a regression.