Are you moving the mouse away from the tab immediately after the middle-click?

If that is the case then maybe wait a short time to make sure the mouse click is recognize. If the mouse is no longer on the tab when the middle-click is processed then nothing might happen.

No it's definitely still within the tab. When I tried to troubleshoot it, I would mess around opening and closing tabs - When it didn't work, I would click exactly the same spot where it didn't work, and then it would work, so it's not why. It seems to happen when I move my mouse and click at the same time, especially a swift movement (Which happens a lot when browsing fast), but it never leaves the tab.

I have managed to replicate it with a 100% success rate. If you hold the middle mouse button on either the text of the tab or the X-button in a tab, and then move away to the white/grey part of the tab and releasing, nothing happens. It's the same with holding on the white/grey area, and releasing on the text or the X.

If you just hold and release within the text, "X" or the white/grey area, it closes fine, but if the click and release is a combination of these 3 areas, it doesn't close the tab.

I just found out it's the same with the bar (either blue or grey, depending if it's focused) on top of the tab.

I've tried starting Firefox in Safe Mode - It doesn't change anything.

What do I do? Should I submit it as a bug to Mozilla or what?

I think that that is expected behavior. When you release the mouse button then the mouse pointer needs to be in the same active area as where you pressed the button and to close a tab that is on the tab you want to close. It is the same with clicking a link with the left mouse button and move away from the link. You just need to make sure not to move the mouse too much when clicking.

No the problem is that the button is released IN the tab. The mouse never leaves the tab. If you click on the text, release on the X or the background of the tab, then the tab doesn't close. It didn't behave like this before Quantum, and it's very unintuitive. It's the same as left clicking a link on one letter, releasing the button on another letter, and then the link doesn't open.

I've made an illustration to explain my point Accidentally moving your mouse like this when browsing happens very often. It's very non intuitive since your mouse never leaves the tab. I'm guessing it happens because the text, background, X, and top blue/grey bar, are all treated like different elements, for some reason, even though they're all part of the tab. Also as I said, it wasn't like this before Quantum.

Middle-mouse works upon "release". If you "click-hold" and move the cursor even a smidgeon, the "release" may not register. Seems to work the same on Quantum as it did before, for me and I have both Quantum and 4 older versions installed right now. Although Firefox has always seemed to be "pickier" about being more exact about the location of the cursor with "click-hold" and the "release" positioning being more exactly the same than some other applications that I have used over the years.

I've never ever experienced this problem with older versions of Firefox. It's not a problem moving the mouse around when releasing, the problem is that releasing on a different element ON the tab doesn't work. You can with no problem click-and-hold, and move it around the whole tab, as long as you release in the same element that you clicked. You can even click-and-hold, move the cursor completely away from the browser, but if you release in the same element it still closes. That's where I'm saying it doesn't make sense, and causes a lot of problems. The tab is for some reason composed of those 4 different elements that I have mentioned, and doing a click-release combination within these 4 elements causes the tab not to close.