I don’t think this is a new discovery but just a reminder for myself when I encounter this problem again.
I encountered this problem when I was using irb (interactive ruby shell) and for some odd reason when I typed backspace it was printing ^H and worse when I hit enter irb crashes. When I returned to my shell backspace seems to be working fine.
This is not exclusive problem with irb although the crashing part is but the solution I think would work in cases where shell is demonstrating this wierd behavior.
I did a quick *nix command:
and displayed that I have
In order to fix this problem here is what I did:
stty erase ^H
Note:^H are not the two characters but typed Ctrl-V Ctrl-H