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Re:Install Win32 OpenSSH test release by mikemaccana on Friday January 01, 2016 @06:52PM (#10824187)
See https://github.com/PowerShell/Win32-OpenSSH/issues/57.

For some reason putty works but iTerm has the backspace issue. Putty user: what's your $TERM?

Ctrl H works as a workaround BTW.

Re:Install Win32 OpenSSH test release by voltagex_ on Friday January 01, 2016 @07:19PM (#10824295)
$TERM from PuTTY - xterm $TERM from Terminal.app - xterm-256color