As a minimal example:
LC_CTYPE=en_US.UTF-8
PS1='\n\[\e[0m\]'
# put something into history:
echo foo
# ^R search for something that should put point in the middle of the string
(reverse-i-search)`fo': echo foo
# attempt to exit with end-of-line (^E)
echo foo
^ <---point is here
Trying to move beyond point does not work.
Also it seems that the prompt is re-drawn after the text? For
example, setting the prompt as:
PS1='\n\[\e[0m\e[K\]'
and repeating the above puts point in the middle of a blank line.