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ReadKey() functions misread arrow keys as ESC on 7.2.0 / Linux

See original GitHub issue

Prerequisites

Write a descriptive title.
Make sure you are able to repro it on the latest released version
Search the existing issues.
Refer to the FAQ.
Refer to Differences between Windows PowerShell 5.1 and PowerShell.

Steps to reproduce

After upgrading from 7.1.5 to 7.2.0 on Linux, both $Host.UI.RawUI.ReadKey() and [Console]::ReadKey() functions return keycode 27 (ESC) when any of the arrow keys are pressed.

Expected behavior

$host.UI.RawUI.ReadKey()

VirtualKeyCode Character ControlKeyState KeyDown
-------------- --------- --------------- -------
            37                        0    True

When arrow key left is pressed; other arrows produce codes 38,39,40

Actual behavior

---clip---
$host.UI.RawUI.ReadKey()

VirtualKeyCode Character ControlKeyState KeyDown
-------------- --------- --------------- -------
            27                        0    True
---clap---
When any of the four arrow keys is pressed, result is always above.

Additionally, character 'A' is typed on next cmdline when up arrow is pressed, other arrows type chars C,B,D:

---clip---
PS > $host.UI.RawUI.ReadKey("NoEcho,IncludeKeyDown")

VirtualKeyCode Character ControlKeyState KeyDown
-------------- --------- --------------- -------
            27         [0m               0    True

PS > A
---clap---
Pressing enter produces result as if I had typed the 'A' myself:

---clip---
A: The term 'A' is not recognized as a name of a cmdlet, function, script file, or executable program.
Check the spelling of the name, or if a path was included, verify that the path is correct and try again.
---clap---

ReadKey() argument "NoEcho" has no effect on above behaviour.

Finally, the problem is not reproducible when running a powershell script from another shell. Executing script below from
either bash or zsh produces correct result, but executing from pwsh does not.

---clip---
#!/usr/bin/pwsh
$host.UI.RawUI.ReadKey()
---clap---

Error details

No response

Environment data

Name                           Value
----                           -----
PSVersion                      7.2.0
PSEdition                      Core
GitCommitId                    7.2.0
OS                             Linux 5.10.0-8-amd64 #1 SMP Debian 5.10.46-4 (2021-08-03)
Platform                       Unix
PSCompatibleVersions           {1.0, 2.0, 3.0, 4.0…}
PSRemotingProtocolVersion      2.3
SerializationVersion           1.1.0.1
WSManStackVersion              3.0