A bit of technical clarification: Terminal emulators seem to default to lines ending in an explicit newline. It's the implicit overflow (printing a letter that wraps to the next line) which makes the previous line soft-wrapped, and a \e[K (clear to EOL) and perhaps a few other similar sequences (e.g. character deletion) that makes it hard-wrapped again.
Newlines are irrelevant, especially since it's often a CR LF so technically the cursor is in the first column when it's moved to the next line. I mistakenly omitted the fact that the "magic" also involves emitting that \e[K before reprinting the last character of the command line, this is the key to the expected behavior, as currently done with non-colored prompts only. thanks, egmont
