"Pedro J. V. Mendes" <pedro.mendes@ist.utl.pt> writes:

[Don't forget to CC the bug tracker address so that the entire
conversation gets tracked. Thanks.]

> Hello, and happy Xmas!
>
> I give you snapshot of a minimal session exposing the problem.
>
> When I was typing the password, the characters were showing in
> normal-face, and after pressing Enter they turned to bold-face, like
> the previous "ssh" command.

Do you see at the bottom of the screen a minibuffer prompt that asks for
the password?  If you enter the password in that minibuffer prompt (not
in the shell buffer), it should replace characters with asterisks.  Make
sure you didn't accidentally switch from the minibuffer to the shell
buffer.

[Screenshot showing the problem, from the OP]