How does the attached patch look? I didn't include changes for the rest
of the escape sequences, because of Eli's objections.

The reason I used the notify function is because it is much simpler than
rebinding insertion commands and having to copy some of the
functionality.  And I don't think the change in the calls to the notify
function for editable-field widgets (and descendants) will be much of a
problem.  I looked for functions that assume EVENT is nil and found
none, nor in-tree or in third-party packages.