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Just type <enter> without cat, your shell will show you another prompt, and the ssh escape command will also work.

No they are correct, fish seems to intercept this or something like that. Only works with cat.

So you're saying 'fish' intercepts it on the far end? The ssh server on the far end shouldn't be sending it to 'fish' until it knows what's coming next.

Is this a current-ish version of OpenSSH or some other client/server?

EDIT Interesting! I tested it with fish and it does indeed intercept it! Wonder how that works.

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