I ran the following commands on my phone in termux and in Kitty on my PC 10 times each and record the results. I did it multiple times because the results seem random.
./src/emacs --fg-daemon -Q
./lib-src/emacsclient path/to/no-perms # in a separate terminal, 10 times
Phone + Termux: 9 out of 10 times, I got the expected results where the terminal was not broken and I saw an error message. on the 10th time there was some weird behavior, but I haven't been able to reproduce it and I don't remember what happened.
PC + Kitty: there were no crashes meaning the terminal wasn't broken anymore. but 6 out of 10 times the error message didn't print. sometimes all I saw was "waiting for emacs..." and some other times all I saw was "...". the other four times was expected behavior colon the error message printed and the terminal wasn't broken.
Note: I have a slightly different environment on my phone compared to the first time. when I first reported the bug I was using the emacs and emacsclient programs located on my phone. this time I used the modified emacs and emacsclient from my desktop over SSH. I don't know if that changed the results. But the bug with unmodified emacs happens just the same over SSH as with emacs on my phone.