From Bugzilla Helper:
User-Agent: Mozilla/5.0 (X11; U; Linux i686; en-US; rv:1.3) Gecko/20030312
Description of problem:
When an old command is on the command line for the purpose of editing it, you
have to hit escape to put the editing into command mode before you can move to
the part you want to alter. It wasn't so in any version of bash I have ever used.
It appears to be a bug rather than a configuration problem because copying the
bash binary from RH 7.3 (GNU bash, version 2.05a.0(1)-release
(i686-pc-linux-gnu)) cured it.
Version-Release number of selected component (if applicable):
Steps to Reproduce:
1. hit arrow down
2. hit arrow up
3. hit w
Actual Results: The w is inserted at the start of the old command.
Expected Results: The cursor should move to the next word of the old command.
I can't believe no one else has reported this and hope it isn't in RH 9.0
Upstream maintainer says this is not a bug, but intentional: see