Prior to this change, when a process resumes because it is brought back
to the foreground, we would reset the terminal attributes to shell mode.
This fixed#2114 but subtly introduced #7483.
This backs out 9fd9f70346, re-introducing #2114 and re-fixing #7483.
A followup fix will re-fix #2114; these are broken out separately for
bisecting purposes.
Fixes#7483.
