This bug was fixed in Ubuntu in the package mate-terminal - 1.26.0-1ubuntu2 see: https://bugs.launchpad.net/ubuntu/+source/mate-terminal/+bug/1955505/comments/2 Probably, Debian can backport this fix.
- Bug#998856: libvte-2.91-0[-common] 0.66.1-1 using wrong con... Vladis Dronov
- Bug#998856: libvte-2.91-0[-common] 0.66.1-1 using wron... Simon McVittie