Li‐ and Mn‐rich layered oxides (LMRs) have emerged as practically feasible cathode materials for high‐energy‐density Li‐ion batteries due to their extra anionic redox behavior and market competitiveness. However, sluggish kinetics regions (<3.5 V vs Li/Li+) associated with anionic redox chemistry engender LMRs with chemical irreversibility (first‐cycle irreversibility, poor rate properties, voltage fading), which limits their practical use. Herein, the structural origin of this chemical irreversibility is revealed through a comparative study involving Li1.15Mn0.51Co0.17Ni0.17O2 with relatively localized and delocalized excess‐Li in its lattice system. Operando fine‐interval X‐ray absorption spectroscopy is used to simultaneously observe the interplay between transition‐metal–oxygen (TM‐O) redox chemistry and TM migration behavior in real time. Density functional theory calculations show that excess‐Li localization in the LMR structure attenuates TM‐O covalency and stability, leading to overall chemical irreversibility. Hence, the delocalized excess‐Li system is proposed as an alternative design for practically feasible LMR cathodes with restrained TM migration and sustainable O‐redox chemistry.