I am thinking of a scenario where unknown stream of data is printed to a terminal or terminal emulator, isn't it so that some sequences of characters may be interpreted as commands and cause damage?
Basically, I am wondering what are the potential consequences of dumping random or unknown sequence of octets to a terminal [emulator]? Using xterm as an example.
There is potential danger. While in theory, dumping "garbage" to a terminal should do no harm, you never know if there is a bug in the code behind the terminal. A certain binary string could have unintended consequences.
There was an exposure in early versions of DOS where doing a DIR of a diskette could (if certain options were enabled for the system) cause commands to be executed off the diskette, potentially installing a virus. The key here was that a console display system was set up to interpret certain character combos as commands. I'm not aware of any "modern" DOS/Windows versions where this is true (outside of HTML, et al), but I know little about xterm et al (which to some degree simulate those old environments), and there could also be a similar danger in some GUI environments.
Way back in the Teletype days, you could damage some teleprinters by sending them "pure binary" data that would cause invalid mechanical sequences. No modern printers should have this problem (though of course the problem of sometimes printing page after page of essentially nothing remains to this day).
Files can be crafted which contain control characters. The control characters can be newline, backspace, anything in the ASCII table. If you want to be certain binary will do no harm, pipe it to | cat -v, or write a filter to catch the no-no's.
