Some of the terminal options (notably Auto Wrap and background-colour screen erase) actually represent the default setting, rather than the currently active setting. The server can send sequences that modify these options in mid-session, but when the terminal is reset (by server action, or by you choosing ‘Reset Terminal’ from the System menu) the defaults are restored.
In versions 0.53b and prior, if you change one of these options in the middle of a session, you will find that the change does not immediately take effect. It will only take effect once you reset the terminal.
In version 0.54, the behaviour has changed - changes to these settings take effect immediately.