Terminal opens new tab instead of new window with Command-N

I dont know why but both Command-N and manually clicking open new window in the file menu of Terminal.app opens a new tab. Anyone encountered this before?

How can I make Terminal.app open new windows instead of a new tab?

Yes, and this was very frustrating when I noticed it since I only ever use tabs in a browser, not to mention opening the tab bar resizes the window >:O

Go into System Preferences -> Dock, then make sure that "Prefer tabs when opening documents" is NOT set to "Always".

You can press Option-Command-N to open a window even if you set always open documents in tab in Dock preferences (this is handy).