As a workaround, you can use gconf-editor to unset the gconf key /apps
/gnome-terminal/global/use_mnemonics. This disables the menu shortcuts
(only in gnome-terminal) so you don't have to turn off the menu with two
clicks in order to be able to use Alt+key in the terminal.

However, I agree this is an annoying bug: having the menu present wastes
screen space, or, if you get rid of it, time.

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https://bugs.launchpad.net/bugs/869326

Title:
  Hide Menu setting is not being respected in GNOME Shell

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