Makes me wonder if Claude Code has similar vulnerabilities, as it has a pretty rich terminal interface as well.

I think the real solution is that you shouldn't try to bolt colors, animations, and other rich interactivity features onto a text-based terminal protocol. You should design it specifically as a GUI protocol to begin with, with everything carefully typed and with well-defined semantics, and avoid using hacks to layer new functionality on top of previously undefined behavior. That prevents whatever remote interface you have from misinterpreting or mixing user-provided data with core UI code.

But that flies in the face of how we actually develop software, as well as basic economics. It will almost always be cheaper to adapt something that has widespread adoption into something that looks a little nicer, rather than trying to get widespread adoption for something that looks a little nicer.