The built-in terminal app seems to be similarly flaky on my Pixel 8. Also, the kernel it boots into is really stripped down, and it lacks a ton of essential features. I was not able to install VirtualHere client to pass through USB devices, and there's no built-in functionality. There's also no way to open it full-screen on the Pixel 8's DP-over-USB-C desktop mode. Hopefully it continues to improve, but it seems like Google is more into extracting value than they are improving their products at this point.

Oh wow. I did a very basic test this morning `ping google.com` and then ctrl+c and it seemed to work okay. Not done any more extensive testing than this though.

Could it be that it's just very flaky on all pixel devices? Or maybe something graphene is doing to harden the OS doesn't play nicely with how it's been implemented?

Control-D works fine for me. It just terminates the VM and you can restart.