That abstract state diagram is not, as eschaton said, how terminals actually work.

And it isn't just real terminals. Several terminal emulators are bad at handling syntactically valid but unknown to the emulator control strings. There are several whose authors hadn't read ECMA-35 and ECMA-48, and based their programs on samizdat lists of control sequences circulating years ago, without realizing that there was a full consistent syntax underlying them. Unrecognized control sequences are sometimes just printed as text, or worse.

Indeed, OSC itself is notorious for being such a case, where for a time some emulators expected BEL instead of ST as the string terminator.