When running a VM on it's serial console in an arbitrary sized terminal, the guest has no idea what size that terminal is. Line editing in particular goes hopelessly wrong, so fighting your way out of a broken VM is made even harder.

Please include the 'xterm-resize' package in VM images by default.
Then you can do eval resize -u to resize your guests idea of the terminal

Note:
a) It's tiny (~20KB)
b) It has very few dependencies
c) Bonus points for adding it into a .profile or similar to get run on virtual consoles [this may be pushing it a bit]