After also stumbling upon this problem, I found a solution for it. If you use
color codes in your prompt, you should escape them with \[ and \] to indicate
that they are non-printable characters and bash shouldn't count them while
determining the length of the prompt. This isn't properly documented on a lot of
sites which deal with color codes in bash.
If you try this prompt, it should work fine.
export PS1='\[\e[0;31m\]\u\[\e[m\]@\h:\w\$ '
Not sure if this can still be considered a bug in bash.
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