That does look strange partly due tac works in somewhat counter-intuitive way as to me. Let's make use of clearly visible separators — commas.

What would I expect to see as the result of the following command:

% echo -ne 'A,B,C' | tac -s, 

?

Well, I see it as there's A separated from B separated from C. Thus (I conclude) being printed in reverse, they should constitute C,B,A. Let's check. Alas, it prints differently instead:

% echo -ne 'A,B,C' | tac -s, CB,A, 

We can conclude tac sticks for original separators placement: A still has it afterwards, as well as B does, but C didn't have it and hence it's printed as is.

What happens if I run tac with -b this time?

% echo -ne 'A,B,C' | tac -bs, ,C,BA 

Seemingly it works this way for -b: it's going through the input in backward direction till it finds a separator. As it's found it's printed:

,. Then it prints the text it skipped while searching:

C. Then the cycle repeats:

,B. As there're no separators left, just the reminder is printed:

A.

Why there is no newline between New and Hello?

According to the explanation I've given above New would be on newline because it was prefixed with new-line, but since Hello wasn't it'd be printed as is.

That does look strange partly due tac works in somewhat counter-intuitive way as to me. Let's make use of clearly visible separators — commas.

What would I expect to see as the result of the following command:

% echo -ne 'A,B,C' | tac -s, 

?

Well, I see it as there's A separated from B separated from C. Thus (I conclude) being printed in reverse, they should constitute C,B,A. Let's check. Alas, it prints differently instead:

% echo -ne 'A,B,C' | tac -s, CB,A, 

We can conclude tac sticks for original separators placement: A still has it afterwards, as well as B does, but C didn't have it and hence it's printed as is.

What happens if I run tac with -b this time?

% echo -ne 'A,B,C' | tac -bs, ,C,BA 

Seemingly it works this way for -b: it's going through the input in backward direction till it finds a separator. As it's found it's printed:

,. Then it prints the text it skipped while searching:

C. Then the cycle repeats:

,B. As there're no separators left, just the remainder is printed:

A.

Why there is no newline between New and Hello?

According to the explanation I've given above New would be on a new line because it was prefixed with new-line, but since Hello wasn't — it'd be printed as is.