It seems like the arrow keys issue occurs when tabs are disabled in Full Control mode (i.e. each session is in its own window). We managed to reproduce it and we'll be working to fix it in the nearest update. Thanks Larry.
Meanwhile, as a workaround the tabbed mode can be used. Sorry for any inconvenience
I did not even know there was a tabbed view and so just used what I thought was the default 'own window' session type.
Anyway, it is good that you have finally tracked this issue down, and look forward to a real fix. In the meantime, use of the tabbed view does address this issue.