This is promising:
https://mitchellh.com/writing/ghostty-devlog-005#xterm-compa...(I have also been bitten by terminals calling themselves `xterm-256color` or some such thing while not being remotely xterm-compatible; GNOME being the worst offender, as usual. My daily driver is mlterm¹, which is pretty good in that respect² — its main downside for me is its idiosyncratic font configuration, which is tailored for multilingual flexibility, not the English-only programmer.)
¹ https://github.com/arakiken/mlterm
² https://invisible-island.net/xterm/xterm.faq.html#bug_mlterm...