Thanks. Every bit of effort helps - that does include discovering that VirtualBox does not seem to support the virtual GPU driver playing well wtih /dev/dri/card0...That was only way that I could start Wayland in VBox, script from the link you proposed doesn't work because kwin_wayland_drm can't open drm device /dev/dri/card0 - which doesn't exist in VBox guest. I have no intention to pollute nor screw my on the metal install – I have 0 interest in running Wayland, just wanted to help. I still think that ^C issue is sddm/ Wayland problem, good luck with your investigation.
But yeah, having support for that in the first place is kind of a pre-requisite for solving the Ctrl-C bug. Things will need to work consistently the same on both metal and in a VM.