For cut and paste to work, you will need to set both the delay after each character as well as the delay at the end of the line. On mine, that is found at Control-A, Z, and then D for the "newline" delay or F for the character delay.
Different applications need different settings. For example, when I was working on PBUG and the port of eWoz, the monitors handle inputs of hex data differently. PBUG reads and stores each pair of characters for a hex digit immediately. So for it, the pause between characters needs to be long enough for it to do a little bit of processing. On the other hand, eWoz reads the keystrokes into a buffer and then processes the buffer. That means that the bulk of the work happens after the "newline".
So eWoz needed a longer newline delay than PBUG. BASIC is another example of something that will read things into a buffer and then process them--sometimes it can take a second for a line of BASIC to be parsed, move code around in memory if it needs to create space, and then put the tolkenized line in place.
So there is no "right" setting for the values and it can take some tweaking. If you start with 20 ms between characters and 500 ms with the newline, you probably will start getting better results.
The KIM ROM only decodes 7 bits. ASCII serial is sent LSB first (after the start bit). That means that bits 0-6 are sent and then the KIM ROM's serial routine starts processing it. So the 8th bit isn't read but doesn't hurt anything at higher baud rates because of the delay before the KIM starts looking for the next character. (In effect, it is kind of a "delay" before the next start bit.) I think the recommendation is to use two stop bits. (Parity isn't used--that would just set the value of 8th bit (with is Bit 7 if you start counting at zero instead of one).)
I have also found that manually setting the time the KIM uses to watch for the next bit one lower than what the KIM measures on it's own helps improve serial reliability. (I think this is probably as much because that extra time it provides after reading the 7th bit is a bit like a pause between characters also.) The values for different baud rates are on my github readme for the PAL-1:
There is also a bit of info in there about the delays for reading MOS format hex files.
One last hint with minicom is that I seem to have better luck with the "past file" option at Control-Z, A, Y than with just doing a regular cut an paste. It does mean you have to put what you want to copy into a file (which, for me, is usually the case anyway).
Thanks,
Jim