If the MUD sends an "echo off" sequence then MUSHclient will stop echoing what you type to the screen *and* stop storing commands in the command history.
This is usually done when it is asking for a password, so the password is not echoed, and also so someone cannot look in your command history and see what it is.
However if the "echo on" is not subsequently sent, then no further commands will be stored in the command history. This is probably what happened to you.
Check the Display menu. If "No Command Echo" is checked then commands are not being stored. You can uncheck it to resume normal operation.
I'm not sure what the proper name for this is, but usually when I type things in to the prompt, I can hit the up arrow on my keyboard to go to the last command I typed in. Only 3 commands that I have typed have showed up (the first 3). I believe that this could be a bug, because I am sure I did not change any options.(and yes, I entered more than 3 commands) Thanks.
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