4.16.3 ‘Keyboard sends Telnet special commands’

If this box is checked, several key sequences will have their normal actions modified:

• the Backspace key on the keyboard will send the Telnet special backspace code;
• Control-C will send the Telnet special Interrupt Process code;
• Control-Z will send the Telnet special Suspend Process code.

You probably shouldn't enable this unless you know what you're doing.