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For instance, iTerm supports italic, which Terminal.app doesn't

It does (just checked).

I believe it's only supported if the font has a defined italic version, and it's unable to generate italic from a regular face.

Which is a major no-no anyway, typographically speaking.

We are talking about terminals. Italics used to be drawn by skewing the pixel clock.

Sure but we have bitmap displays now. There’s no reason our tools can’t take advantage and adapt to the times.

True, but generating italics when they are not explicitly defined is a perfectly reasonable thing to do.