Are you doing a cut all the way through or just a slot? I find chip packing generally to be advantageous, holding the cutout in place without using tabs. But I use a compression bit to cut Baltic birch, I would expect an upcut to clear a lot more, but not all the chips. Here is an example, using 1/8” bit to cut through 1/2” (12mm) Baltic birch ply, single pass.
Closed Cottage sign
Closed Cottage sign