How do I fix Chrome 'show in folder' to open in file explorer and not in new tab?

Just execute the following lines and the problem will be fixed. No restart (neither of chrome, nor of anything else) is needed:

$ sudo apt-get install libfile-mimeinfo-perl
$ mimeopen -d /home/moose/Documents
Please choose a default application for files of type inode/directory

1) Caja  (caja-folder-handler)
2) Other...

use application #1
Opening "/home/moose/Documents" with Caja  (inode/directory)

I had the same problem after uninstalling pcmanfm and changing it for Thunar.

No need to install anything. Chromium/Chrome manages this function through xdg-open, and you have to modify it.

Check which is the default file manager in xdg-open:

$ xdg-mime query default inode/directory

It should give an unwanted one or one that is no longer installed.

Then set the desired default file manager in xdg-open. For caja it should be:

$ xdg-mime default caja.desktop inode/directory

or something really similar.
It worked immediately for me. I learnt it from: https://wiki.archlinux.org/index.php/xdg-open

For me, further to @elmanu's answer xdg-mime default caja.desktop inode/directory, it was running

update-desktop-database ~/.local/share/applications/

which finally updated the default application.

After this, running xdg-mime query default inode/directory now showed the new default application.