Yes the 1996 Apple was on the edge of bankruptcy, yet Mac OS 8 was definitely much more polished than Tahoe.
OS 8 was a platinum theme over System 7. Which was a slightly better System 6, which wasn't significantly different than System 4.
System 7 was good for the time, OS 8 and 9 were not, and Apples inability to improve the OS were really starting to show. Windows 95 was a more stable OS than OS 8. Tahoe is better.
Not to mention that the OS itself was still mostly 68K emulated code even on PPC Macs and holding the mouse down over the menu caused all apps to stop running.