Java doesn't 'handle' that character at all. All it knows about is a byte stream onto which the OS says it can write bytes, and it will happily write bytes into it, including an ASCII backspace.
What happens when the stream receives that character has nothing whatsoever to do with Java, it is totally terminal-dependent. Some terminals will erase the previous character, some will display the backspace character as some weird glyph, or even as a special "backspace character" glyph. Some may drop the character altogether if they can't interpret it, others (most terminal emulators, in fact) will behave differently depending on how they're configured. But all this has nothing to do with Java, they will behave that way whether they're written to by Java or Perl print
or C++ cout
or whatever else.
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