Tax efficiency refers to on-going tax costs while holding, not due to capital gains when you sell shares. Those on-going costs come from dividends and LT and ST capital gains distributed by the fund itself. Dividends are unavoidable since the fund has to distribute whatever they collect from the underlying holdings but capital gains depend on turnover (buying and selling to track an index and to balance net inflows and outflows into the fund).
In general, ETF’s have more tools to avoid realizing LT capital gains due to the creation/redemption process carried out by Authorized Participants. Vanguard’s proprietary dual-fund structure allows Vanguard mutual funds to share the tax advantage of their ETF partner (google “heartbeat trades”) so for Vanguard the ETF class isn’t more efficient since the mutual fund is equally efficient.