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What does the "Rub" key do ?

Delete a character i.e. "rub out", presumably.

Is that a carryover from the typewriter days ?

Teletypes, not typewriters, punching out paper tape.

ANd 'DEL' is 0x7F in ASCII - so it would punch all the holes, the only way to make 1 char punch turn anything to the same thing.

Heh.

My only brush with that kind of thing was servicing computers that wrote to the paper tape punches we used in the Marines in the early 90s.

And this is why DEL is properly a forward delete operation: it erases the character under the cursor and advances (the tape) over the next.

I blame the VT220 for screwing this up.

Rubber is the British English word for eraser.