The regressions with the Terminal app originate from the stock OS, including the VPN issue. The VM data also breaks and data can't be recovered at times. Don't store sensitive data without backups or run anything for production but feel free to try it out.
We do improve the Terminal app in a few ways and these fixes is something we need to look into but because it's still an experimental developer option it's priority isn't so high. If the stock OS deals with it first then it's less work on our plate. Desktop Mode needs to be first for all the cool stuff to happen.
What users see now will likely be very different to what our plans are should we be able to execute them. We don't want to just have a terminal but rather a VM manager capable of running other operating systems and GUI apps. Debian alone isn't desirable for our use case and we'd want a hardened OS like secureblue instead (ARM builds is beta). Virtualization could be extended to GrapheneOS or individual apps too.
