I have the following gnome terminal profile settings:
Backspace = ASCII DEL Delete Key = Escape Sequence
If the logged in session in the terminal window is my own user id then the delete key does nothing. If however, I su -l in the same terminal window then the delete key removes the character under the cursor and left shifts the rest of the line.
I am fairly confident that the delete key worked in the same fashion for my usual user id up until quite recently. Does anyone know of why or how this behaviour could differ between two separate users in the same terminal window?