I would have one Idea and that would be uninstall the Terminal and then install it again. Maybe that could help. But to do that You would need another Terminal to type in the Commands. For the Case, You want try it:
sudo apt purge gnome-terminal
sudo apt autoremove [But be careful with this and check the List with the Packages that will be deleted first before delete them]
I don't know, it's a really big difference for it to be just because of the Flatpak format.
What I like about Alacritty is that the configuration is done using a plain text file. You can change that anytime, put that somewhere online and then download it, and you have the exact same setup in no time!
I took a moment to look at the source code for Gnome Terminal and it looks like the Gnome Terminal windowed application has a mismatch in how it handles scaling.
This can create a situation where X windowing can miscalculate the DPI when scaling or GTK4s scaling mismatches the Xorg scale factor.
Either way, both of these are due to a bug within Gnome which leaves it solely on Gnome to repair.
What an end user can do as a workaround is use a different terminal emulator (as others suggested above).
Or they can set their Xorg conf file /etc/X11/xorg.conf to default to only DPI of 96
Section "Monitor"
Identifier "Monitor0"
Option "DPI" "96 x 96"
EndSection
A person may try using dconf-editor or terminal to reset the Gnome Terminal saved window configurations dconf reset -f /org/gnome/terminal/
Or gsettings to force the scale factor gsettings set org.gnome.desktop.interface scaling-factor 1
Hardware acceleration can be disabled in etc/environment but I cannot remember the command and looking it up, I found conflicting information I am not sure about.
Thank you everyone who joined in to give their thoughts and support, and special thanks to @Ponce-De-Leon for putting in so much time to help me with the issue.
Ok your investigation supports what Storm suspected earlier about a possible Gnome Terminal bug, so I will go with the easiest solution of using another terminal emulator as you and the others have mentioned.
So I think because XTerm is also on this machine now, due to installing something else that apparently brought XTerm with it, I will use that. I am so lazy.
The con is, I think it is mainly meant to be a terminal that runs things when the user is not present, as its default state is deplorable.
This might be the better option, since I have really gotten used to using vi(M-tiny) now that I'm a Linux user (haha) and would find it hard to go back less functional text editors. So I look at the terminal a lot.