patch 9.1.1078: Terminal ansi colors off by one after tgc reset

Problem:  Terminal ansi colors off by one after tgc reset
Solution: Set the correct index for libvterm palette,
          revert parts in libvterm/src/pen.c that deviated from upstream
          (Julio B)

fixes: #16568
closes: #16573
related: Vim patch v8.2.0804

Co-authored-by: Christian Brabandt <cb@256bit.org>
Signed-off-by: Julio B <julio.bacel@gmail.com>
Signed-off-by: Christian Brabandt <cb@256bit.org>
diff --git a/src/testdir/dumps/Test_terminal_ansi_reset_tgc.dump b/src/testdir/dumps/Test_terminal_ansi_reset_tgc.dump
new file mode 100644
index 0000000..c6f6d72
--- /dev/null
+++ b/src/testdir/dumps/Test_terminal_ansi_reset_tgc.dump
@@ -0,0 +1,12 @@
+|$+0&#ffffff0| |p|r|i|n|t|f| |'|\|0|3@1|[|0|;|3|0|;|4|1|m|h|e|l@1|o| |w|o|r|l|d|\|0|3@1|[|0|m|\|n|'| @30
+|h+0#0000001#e000002|e|l@1|o| |w|o|r|l|d| +0#0000000#ffffff0@63
+|$| |p|r|i|n|t|f| |'|\|0|3@1|[|0|;|3|0|;|4|1|m|h|e|l@1|o| |w|o|r|l|d|\|0|3@1|[|0|m|\|n|'| @30
+|h+0#0000001#e000002|e|l@1|o| |w|o|r|l|d| +0#0000000#ffffff0@63
+|$| > @72
+|!+2#ffffff16#00e0003|s|h| |[|r|u|n@1|i|n|g|]| @43|1|,|1| @11|A|l@1
+| +0#0000000#ffffff0@74
+|~+0#4040ff13&| @73
+|~| @73
+|~| @73
+|[+1#0000000&|N|o| |N|a|m|e|]| @47|0|,|0|-|1| @9|A|l@1
+| +0&&@74
diff --git a/src/testdir/test_terminal.vim b/src/testdir/test_terminal.vim
index 5343efb..b53f0cd 100644
--- a/src/testdir/test_terminal.vim
+++ b/src/testdir/test_terminal.vim
@@ -2149,6 +2149,30 @@
   exe buf . 'bwipe'
 endfunc
 
+func Test_terminal_ansicolors_default_reset_tgc()
+  CheckFeature termguicolors
+  CheckRunVimInTerminal
+
+  let $PS1="$ "
+  let buf = RunVimInTerminal('-c "term sh"', {'rows': 12})
+  call TermWait(buf)
+  " Wait for the shell to display a prompt
+  call WaitForAssert({-> assert_notequal('', term_getline(buf, 1))})
+
+  call term_sendkeys(buf, "printf '\\033[0;30;41mhello world\\033[0m\\n'\<CR>")
+  call WaitForAssert({-> assert_match('hello world', term_getline(buf, 2))})
+  call term_sendkeys(buf, "\<C-W>:set notgc\<CR>")
+  call term_sendkeys(buf, "printf '\\033[0;30;41mhello world\\033[0m\\n'\<CR>")
+  call WaitForAssert({-> assert_match('hello world', term_getline(buf, 4))})
+
+  call VerifyScreenDump(buf, 'Test_terminal_ansi_reset_tgc', {})
+
+  call term_sendkeys(buf, "exit\<CR>")
+  call TermWait(buf)
+  call StopVimInTerminal(buf)
+  unlet! $PS1
+endfunc
+
 let s:test_colors = [
 	\ '#616e64', '#0d0a79',
 	\ '#6d610d', '#0a7373',