With the current 'develop' branch, it seems that all 'top level' bindings are now available in term (char sub-mode) in both insert state and emacs state. This behaviour seems to have been introduced to as a fix for #3927, so this is evidently expected behaviour for some people. I would argue that this bug was a feature--the whole point of term-char-mode is that all keystrokes except for the escape key(s) are sent to the terminal. Any terminal app using M- keybindings is unusable with this behaviour.

I would also argue that #4054 was fixed with a kludge. It was already possible to send C-z with ESC C-z, but the real problem was that C-z was available in term-char-mode.