iTerm in a mode I'm not familiar with. How do I get it back to normal mode
This looks like what happens when you start typing a command and then hit cmd+;. The options in that mode are  :

iTerm2: Highlights for New Users: Autocomplete
Any text that exists in a tab or its scrollback buffer can be autocompleted in that tab. To use autocomplete, type the beginning of a word and then press cmd-;. An autocomplete window opens showing the top 20 choices for words beginning what you have entered. The list can be filtered by typing a subsequence. The filter can be reset by pressing backspace. If you make a selection and press return, it will be entered for you. If you make a selection and press tab, your autocomplete will be extended with the selection.

To just get &quot;out of this mode&quot; – not making a selection – hit esc.
This then could therefore be for this special case a setting found 'automated' in  Preferences&gt;Profiles&gt;Advanced&gt;Triggers:

If that's the case, then clicking edit should open a sheet-pop-up where you see some entries, one of them providing this now unwanted feature.

In the lower left here is a plus and minus sig box. Select the unwanted trigger and delete it.

Alternatively, you might just create an entirely new profile (first picture with &quot;Default&quot; + &quot;TUSTEP&quot;), click the plus sign  in the lower left, and compare settings with your former &quot;Default&quot;-profile (in case you have some more sophisticated settings).

The files at
~/Library/Preferences/com.googlecode.iterm2.plist
~/Library/Application\ Support/iTerm2
might also be worth a look.
If there are external 'input manipulators' installed (text autocompleter, scripters, listeners to events) things get more complicated…