In ifup-ppp, if ESCAPECHARS is "yes", the flag "asyncmap
FFFFFFF" is added to the options to pppd. All characters
will be escaped. So far so good. If it is not "yes" no
flag is added, no flag is added. According to the manual
page for pppd "If no asyncmap option is given, no async
character map will be negotiated for the receive direction;
the peer should then escape all control characters." Which
means all charactars will STILL be escaped.
It appears to me the correct thing to do in ifup-ppp would
be to add "asyncmap 0" if ESCAPECHARS is "no".
This has been assigned to a developer as a change request.
Fixed in initscripts 3.83.