The vast majority of your complaints are handled by libghostty-vt itself, not by this person's Emacs wrapper software over libghostty.
Ghostty is a great piece of software, with a stellar maintainer who has a very pragmatic and measured take on using AI to develop software.
Looking at the sophistication of modern security exploits, I'd say that just a few minor gaps, strategically positioned, can lead to surprisingly drastic results. Of course, Emacs is a niche editor/IDE/OS/whatnot, so an unlikely target, but still.
It's a great proof of concept though. In the meantime, I'll stick with vterm.