Terminal graphic drawing is driven by the remote end, which have to send appropriate escape sequence to tell the client to switch into graphic drawing mode. It seems your Telnet server uses a sequence we don't support currently.
Can you send us a log of whole telnet session to email@example.com please? It can be produced easily by setting the Recorder property as described at Telnet recording tutorial or just use the Telnet WinFormClient sample and enable recording (Menu: Tools -> Start recording).
(also may be, you will find the post how to enable Wyse60 support useful)