Remember those "lines of force" you always see in diagrams of magnetic fields. They're a simplification, but imagine for the moment they're discrete entities.
Imagine one of the lines penetrating a conductive hunk of metal, like the handle of a spoon. Now move the line sideways and you get a circular current going around each of them. This looks like an eddy in a stream. (It also resists the motion of the field line - as if you were trying to stir thick grease. Meanwhile the circulating current causes resistive heating in the metal.)
If you cut up your metal into thin plates and put a TINY bit of insulation between them (or just let them oxidize a bit), the currents can flow within the plates but has difficulty flowing from one to another. Replace your solid hunk of magnetic metal with a stack of plates and it does just about as well as a solid hunk for carrying the magnetic field, but now the insulation between the layers can impeed the eddy currents.
There are three ways to orient them with respect to your moving magnetic field lines.
The first is to have the lines enter through the faces of the plates. In this case the eddy currents circulate within the plate unhindered. You might as well have left the metal in a solid lump.
The second is to have the lines enter through the edge of the stack, and move so they go at right angles, jumping from plate to plate. This is better. But it isn't ideal. The moving field induces a voltage in the plate - at some fraction of a volt per inch of plate. This adds up along the length of plate that is exposed to field moving in the same direction, eventually becoming large enough that it may drive a current from one plate to another through the very thin insulation or any defects in it.
The third is also to have the lines enter through the edge of the stack, but this time oriented so the field slides along the edges of the plates. ("Here we go sliding down the razor blade of life." to quote Tom Lehrer.) The voltage still adds up - but this time it's adding up across the thicknes of the plate rather than along its length. Result: a miniscule voltage that can't drive a significant current through even the thinnest insulation - but must drive it through many gaps, rather than back-and-forth through only a few. So the eddy currents across the gaps are virtually nonexistend even if the insulation is truly rotten, and the major eddy currents are just those that circulate WITHIN the thin plate - again vanishingly small.
In the third orientation the eddy currents crossing the plate boundaries are not significant. (There's still drag from eddy currents circulating as edge-on vortices within the plates, or crosswise in the copper wiring - but due to the thinness of the wire and plates these are quite limited - and they were present (or replaced by something larger) in the other magnetic material arrangements.)
