That's probably Firefox's own Firefox Multi-Account Containers[0]. Groups caches/cookies into designated categories for each tab (personal, work, shopping, etc.), with smart recognition for assigned sites.
Someone should do a study on the performance impacts of using something like this on all sites for various kinds of "typical" web browsing profiles. I'm honestly guessing a lot of the losses would be in the noise for me personally.
There is an additional Firefox extension that integrates with multi-account containers, Temporary Containers. This is highly configurable - I have it create a new container for every domain I visit, with a couple of exceptions that are tied to permanent containers.
I run that on my personal devices.
At work, there is so much in terms of SSO the amount of redirects that happen mean that temp-container-per-domain breaks all sorts of workflows, so I go without on the work machine.
I notice no major difference between these two configurations, although I'm sure that there would be things that are measurable, though imperceptible.
I've had first party isolation turned on for possibly a couple of years now (certainly since before the pandemic) and it does break a small number of sites but nothing I particularly care about. Except that one internal tool that I've taken to loading in Chrome :P.
I don't recall the last time I had to temporarily disable it to allow something to work.
I believe the 'First-party isolation' feature does this, but you need to enable it from about:config, and even then, I'm not sure if it is complete or bug-free.
I'd like to see something like the firefox container extension automatically open a new container for every unique domain name. It could get tricky for eg. federated logins, so I'm not 100% sure what the implementation would look like. But it'd be nice to have the option.
The Temporary Containers addon[1] does this. Combined with the usual Multi-Account Containers "always open this site in..." mechanism you can have some sites always open in a single container, but all other sites open in temporary containers that get deleted shortly after you close their tab.
For clarity - the workflow is basically that all sites would be temporary containers, except sites you explicitly set to be managed by Multi-Account Containers?
edit: I'm trying this out, seems to work nicely - but assigning all the sites that i want permanent state on to different account containers is a bit of a chore. Feel like i'm doing something wrong there.
I commented on the main post, but First Party Isolation is exactly what you want, and breaks relatively few websites (and there's an extension to turn it on/off if you do use a website it breaks).
[0] https://addons.mozilla.org/en-US/firefox/addon/multi-account...