If you need test1's logic as setup for test2, then you already have that "linear timeline" -- for test2 all by itself. Additionally (that is, redundantly) running the same setup code "prefix" by itself in test1 doesn't remove test2's linear timeline.

ETA: I'm assuming your objection to a "linear timeline" is that it reduces the potential for running tests in parallel -- have I got that right? If not, what do you see as being the problem with it?

If I know that step 1 is correct for all the combinations (N) of its input (in test 1), in test 2, I only need to test the specific combinations (M) of step 2, treating step 1 as an axiom. So no need to have NxM in one test, or NxM tests.

Like if you were testing a drone stabilization software, testing the flying state can always assume that it has indeed taken off. No need to validate that it has done so for each scenarios, I can directly put it the correct value. It’s a contrived example, but that axiomatic aspect helps greatly when designing interfaces to reduce coupling between step 1 and step 2.