I'm using xterm.js with the canvas/gpu renderer in my app, driving these modern coding agents that seems to use every features in the book of terminals and it's perfectly fine.

The dom renderer is also perfectly fine, just needs a little bit more careful CSS to make it look right with some of the fancy line art.

I do use ghostty and it's alright. It's required for some rich TUI ai seems to be pumping out. Otherwise I prefer tilix and the default gnome terminal, but it might be just because of years of habit.