Split the screen: c-x 2, 2nd window in shell-mode with M-x shell, everything is fine. Am i missing something here?
For example, pressing 0 to go to beginning of line goes to before the $PS1, rather than the input beginning, going from NORMAL → INSERT inserts text at the end instead of at the cursor, Emacs motion keys doesn't work, etc. I think if I take some time to remap the key it might work, but usually I just switch to Emacs mode or just restrict myself to use only cursor key to navigate.