Note I was using
$ stty --all|grep rows
speed 38400 baud; rows 25; columns 111; line = 0;
$ env|grep TERM
TERM=xterm-256color
P.S., triggering the warning is easy:
$ touch \#a#
$ emacs -nw -Q a

You might say "why does the modeline overwrite it? The warning is one
line below the modeline!"

And indeed it is. But disappears very fast when running emacs -nw -Q a.