I created a report using report builder 3 and saved it to report manager. However, when I view the report on report manager, I noticed that tabs are in separate rows as shown below. Notice: Show tabs in a separate row" is off.
Solution:
Uninstall IE 11 and resort to IE 10. It works as expected as below.
Another option is to add the URL (http://localhost/) to the compatibility view. You can find the option as below.