I contacted Thomas Dickey (maintainer of xterm) and he said this about the issue: drivers, or Xorg in general - for instance the parts painting by XCopyArea (used by xterm and some other applications) may not be getting repainting-events https://lists.cairographics.org/archives/cairo/2015-May/026284.html or buggy acceleration features https://invisible-island.net/xterm/xterm.faq.html#compiz_bugs