The bug I'm trying to illustrate here is that, with a custom prompt, xterm and node-pty produce a weird behavior by default. To build the reproduction app, you can run docker compose up -d. The application will launch on port 3001.

Then, try typing a very long command, you will see your current line being overwritten when you exceed a certain number of characters. If you now comment the custom prompt line (l5 of back/Dockerfile, don't forget to remove the backward slash on l4), rebuild and run the app with docker compose up --build -d, you'll see that everything works fine.