I use foot which is Wayland aware and renders Unicode fonts. Honestly I don't need much from the terminal itself as I'm usually in tmux to deal with all the "tabs" and scrollback.
I used to rely on Sway for terminal tabs and splits. Only recently did I realize that tmux is the better option, even for local use. Already used tmux for SSH sessions.
Muscle memory. I already did development on remote machines in nvim.
If I start tmux in the root of a project, then every new pane or window I open automatically starts in that directory. So no need to cd to the root for every new shell session I start.