Except for: There is no bug that originates in a GNU version of an old networking program and magically makes its way into the NetBSD, FreeBSD, DragonFlyBSD, and OpenBSD (Yes; I checked.) versions of that program.
History simply didn't happen that way.
This bug goes as far back at least as far as the Jolitz-released 386BSD source for libexec/telnetd , where it can be found and which is credited in the GNU versions of the file. GNU just took the 386BSD code. But BSD had a telnetd before 386BSD. In BSD, telnetd itself goes back to 1983. Although its code to do line mode did not pre-date RFC 1116, which was published in August 1989.
The code to do line mode was written the month after that RFC, by Paul Borman, and the bug is in the very first version of that code:
* https://github.com/dspinellis/unix-history-repo/blob/dc8d504...
This bug is not 32 years old.