Two points:
a) metaSendsEscape is a workaround (for keyboard settings where
one wishes to use the meta key in cases where alt is not preferred).
b) "8bit-clean" mode as applied to readline requires some explanation.
To digress, man terminfo:
If the terminal has a ``meta key'' which acts as a shift key, setting
the 8th bit of any character transmitted, this fact can be indicated
with km. Otherwise, software will assume that the 8th bit is parity
and it will usually be cleared. If strings exist to turn this ``meta
mode'' on and off, they can be given as smm and rmm.
and man xterm
metaSendsEscape (class MetaSendsEscape)
If "true", Meta characters (a character combined with the Meta
modifier key) are converted into a two-character sequence with
the character itself preceded by ESC. This applies as well to
function key control sequences, unless xterm sees that Meta is
used in your key translations. If "false", Meta characters
input from the keyboard are handled according to the eightBit-
Input resource. The default is "false."
xterm does in fact toggle the eightBitInput resource setting when the terminfo
smm/rmm capabilities are sent. But if your meta key does in fact correspond
to what xterm thinks is the meta key (inference is needed since X doesn't want
to provide that detail), then setting metaSendsEscape will cause your keyboard
to ignore the feature for inputting codes 128-255.
(I'm aware that European keyboards have many of the Latin-1 codes, depending
on national flavors, but that's not the case elsewhere).