I have downloaded Tree Tabs but cannot reproduce the bug.
In Tree Tabs Settings there is also an option "after closing active tab, activate...", which may cause conflict. Could you try setting this to "let browser handle which tab to activate" and see if it works?
If the problem still exists, open an issue here:
Please share your settings and steps to reproduce e.g. this extension's setting order is ..., that option of Tree Tabs is ... , open tabs in this way ... , and when closing tab ..., I expect ... activates but ... activates instead. Thank you!