SDL is for everyone. I use it for a terminal emulator because it’s easier to write something cross platform in SDL than it is to use platform native widgets APIs.

Can the SDL terminal emulator handle up-arrow /slash commands, and cool CLI things like Textual and IPython's prompt_toolkit readline (.inputrc) alternative which supports multi line editing, argument tab completion, and syntax highlighting?, in a game and/or on a PC?

I think you're confusing the roles of terminal emulator and shell. The emulator mainly hosts the window for a text-based application: print to the screen, send input, implement escape sequences, offer scrollback, handle OS copy-paste, etc. The features you mentioned would be implemented by the hosted application, such as a shell (which they've also implemented separately).

Does the SDL terminal emulator support enough of VT100, is it, to host an [in-game] console shell TUI with advanced features?

I'm not related to hnlmorg, but I'm assuming the project they refer to is mxtty [1], so check for yourself.

[1]: https://github.com/lmorg/mxtty

You are right, I was too focused on the gamedev argument that it made me use an incorrect statement

SDL it's great for embedded machines with limited displays.