4.16.3 ‘Keyboard sends Telnet special commands’
If this box is checked, several key sequences will have their normal actions modified:
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the Backspace key on the keyboard will send the Telnet special backspace code;
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Control-C will send the Telnet special Interrupt Process code;
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Control-Z will send the Telnet special Suspend Process code.
You probably shouldn't enable this unless you know what you're doing.