[BUG] Terminal rendering completely broken in v2.1.7 - lines scattered diagonally

Preflight Checklist

• [x] I have searched existing issues and this hasn't been reported yet
• [x] This is a single bug report (please file separate reports for different bugs)
• [x] I am using the latest version of Claude Code

What's Wrong?

After updating to v2.1.7 today, terminal output is severely corrupted.
Lines are scattered diagonally across the screen, making output completely unreadable.

Symptoms:

• Lines overlap and overwrite each other
• Code output is scattered diagonally across the screen
• Spinner messages (Calculating..., Orbiting...) remain on multiple lines
• Prompt text gets truncated
• Text gets cut off at the right edge

Environment:

• Claude Code version: 2.1.7
• OS: macOS Darwin 25.2.0
• Terminal: Ghostty and Terminal.app (both affected)
• Shell: zsh

<img width="1728" height="1084" alt="Image" src="https://github.com/user-attachments/assets/67c8019a-7d6f-4d66-bd18-63d01a314b14" />

What Should Happen?

Output should be displayed correctly line by line without any corruption or overlapping.

Error Messages/Logs

Steps to Reproduce

1. Update Claude Code to v2.1.7
2. Start Claude Code in terminal
3. Run any command that produces multi-line output (e.g., ask Claude to display source code)
4. Observe that the output is scattered diagonally and unreadable

Claude Model

Opus

Is this a regression?

Yes, this worked in a previous version

Last Working Version

_No response_

Claude Code Version

2.1.7

Platform

Anthropic API

Operating System

macOS

Terminal/Shell

Other

Additional Information

_No response_