IKBD packets are interpreted somewhat... weirdly. For instance UP arrow doesn't work anymore, I have to use INSERT. shell history's UP arrow also doesn't work and if I use CTRL+P, I have to go RIGHT if I want to move the cursor LEFT.
Fortunately, this was an easy one: in 2018, there were some fixes for the Atari keymap in the kernel so it emits standard PC keycodes, therefore using an Atari console keymap breaks everything. The fix is easy, /etc/default/keyboard shouldn't read as XKBMODEL="ataritt" but as XKBMODEL="pc105". That fixes the keyboard weirdness.