on keyboard behavior in emacs -nw

[Harry Putnam <reader@newsguy.com>]

I see the phenomena in several recent installs of debian stable and 1
of testing.

In emacs -nw M-x, instead of giving the familiar `M-x' prompt it
inserts a tiny char in the buffer that looks something like a tiny
planet with with a ring around on forward leaning angle.

In fact M+<many-keys> many letters and other char create letters with
various accents or the like:

M-x = ø
M-a = á
M-q = ñ

Foreign (to an english speaker) language letters with accents and
etc.

Any one know what causes this?

Wrong keyboard settings? ... I did run dpkg-reconfigure console-setup
But just got the prompt back after a moment or two...

I did run dpkg-reconfigure keyboard-configuration
And:
  /etc/default/keyboard shows
  
  # KEYBOARD CONFIGURATION FILE
  # Consult the keyboard(5) manual page.
  XKBMODEL="pc104"
  XKBLAYOUT="us"
  XKBVARIANT=""
  XKBOPTIONS="terminate:ctrl_alt_bksp"
  BACKSPACE="guess"

Restarted keyboard service but nothing changed.

echo $LANG shows:
en_US.UTF-8

echo $LC_COLLATE is just blank

It must be some kind of env setting, but what and how to fix?