This is a weird bug indeed. It happens here too... from some reason tset (terminal initialization) does not recognize any type of suggested terminal for ARMEL or X86 (although the terminfo files do exist in my /scratchbox chroot).

The easiest solution is to hit CTRL+C and relogin to the scratchbox. Notice that your active target has now changed.

Not elegant, but works...
hope this helps.

Lior.