Best i understand you need to use a xterm derived terminal for this to work, because the sub-program used by w3m for this draws over the terminal window to make things happen.
One more thing we can kiss bye bye with Wayland i guess.
It's curious how we're prepared to replace X (with people writing tiling WMs and the like that support it) but somehow the move away from xtermy things (and backwards-compatibility-all-the-way-back-to-way-back-when) hasn't really caught on much, at least on the Linux side of things yet. Any exciting work in this area? I'm aware of Black Screen and some other work on the Electron/rewrite-everything-in-JS front (Hyper, I think, is another).
I've been using Alacritty myself for a couple of weeks now. It's not too bad: the htop header bar won't render properly and catting random binary files crashes the terminal pretty quickly, but it's smooth and does everything a good "tmux VM" should do well.
I understand iterm2 on macOS is a significantly improved experience?
Could be because as of yet the meat of terminal, the tty, happens in the kernel. And the kernel devs, as last as Torvalds remain in charge, is not as magpie about chasing the latest shinies.
Note however that there exist effort towards moving the tty into user space. And one leading figure in that is currently involved with systemd.
So i suspect it will happen, it is just a question of when...
The "catting binary files" problem largely goes away when you use a terminal emulator that doesn't implement ISO 2022 escape sequences, or where ISO 2022 support can be and has been turned off. The mosh people made a big deal about this approximately five years ago.
Their claim that only mosh is like this, still present on their WWW site, is not in fact true now.
I say "largely" because there are a couple of other nasty escape sequences, like (for example) OSC sequences to set window titles and terminal names, that binary files can also accidentally contain and that therefore have to be disabled. Removing ISO 2022 makes the problem far less likely to be hit, but doesn't quite eliminate it entirely.
The image preview of ranger has different backends: besides xterm it works on iTerm2 and urxvt using their custom methods. Not sure about Wayland though.
One more thing we can kiss bye bye with Wayland i guess.