Michal 
I rebooted my computer and now it decided to only process keyboard events when the mouse is moving. Otherwise nothing happens, and the key presses are queued until I move the mouse. The terminal also only updates when I move the mouse.
Not sure what is happening, since the whole UI shows this behavior. When running `xev` from SSH, I do see the keypresses immediately, no mouse move required. However, in order for the window to show, I do have to move the mouse first.