I use eshell as my main shell. Still, a terminal emulator with zsh is kept around for longer running processes and scratchpads. One thing that’s essential for this setup to make sense is that eshell and zsh share the same history file. Sadly, this doesn’t work out of the box: zsh stores its history in a metafied format—nothing that’s not fixable on the Emacs side, of course!

This email explains the problem quite well. In short:

[…] when 0x80-0x9F characters are used, then always 0x83 Meta character is inserted and following character is bit shifted, […]

This is not a bug, but expected behaviour; zsh’s history is saved in exactly such a metafied format. The upshot is that, when setting eshell-history-file-name to e.g. "~/.config/zsh/zsh_history", Emacs either won’t know how to properly encode the file upon exiting eshell, or one will get suggestions—using a package like esh-autosuggest—containing garbage like \304§ instead of ć.

The linked discussion helpfully contains a small C program to unmetafy the history:

#define Meta ((char) 0x83)

/* from zsh utils.c */
char *unmetafy(char *s, int *len)
{
  char *p, *t;

  for (p = s; *p && *p != Meta; p++);
  for (t = p; (*t = *p++);)
    if (*t++ == Meta)
      t[-1] = *p++ ^ 32;
  if (len)
    *len = t - s;
  return s;
}

This looks pretty terse, at least to my non-C-reading-eyes, but essentially every time 0x83 is encountered, we delete it and XOR the following character with the number 32. An implementation in elisp might look like the following:

(defun slot/unmetafy ()
  (cl-flet ((unmetafy (input)
              (let ((i 0) output)
                (while-let ((char (nth i input))
                            (inc-and-char
                             (if (= char #x83)
                                 ;; Skip meta character and unmetafy.
                                 `(2 . ,(logxor (nth (1+ i) input) 32))
                               ;; Advance as usual.
                               `(1 . ,char))))
                  (cl-incf i (car inc-and-char))
                  (setq output (cons (cdr inc-and-char) output)))
                (decode-coding-string
                 (apply #'unibyte-string (nreverse output))
                 'utf-8-unix
                 t))))
    (let ((hist-file "~/.config/zsh/zsh_history"))
      (with-temp-buffer
        (insert (mapconcat (-compose #'unmetafy #'string-to-list)
                           (s-lines (f-read-bytes hist-file))
                           "\n"))
        (write-file hist-file)))))

This can be conveniently integrated into an eshell/exit-like function, such as

(defun slot/eshell-exit (&optional arg)
  "Exit eshell and kill the current frame."
  (interactive "P")
  (slot/unmetafy)
  (eshell-write-history)
  (save-buffers-kill-terminal))

Finally, one just need to take care to bind that function to a key, and to unmetafy the history when eshell starts.¹

(use-package eshell
  :hook (eshell-hist-load . slot/unmetafy)
  :bind (:map eshell-mode-map
              ("C-x C-c" . slot/eshell-exit)))