bash is meant to send the escape sequence that in the terminfo database is known as "el" (clear to the end of line).
So another possibility is that the terminfo database is not correct (or possibly that the wrong entry in the terminfo database is queried if
$TERM is not set properly.
tput el | cat -vt give you something like
^[[K? What's the value of
For instance, I could obtain the same behavior as you describe by setting
You could also run bash through
script to see what escape sequence is actually sent by bash upon Ctrl-U