Apple Terminal has a lot of problems. As others have mentioned, it lacks support for 24 bit color, enforces minimum contrast ratios without any ability to disable them (meaning you cannot set arbitrary color themes), is hopelessly bad at Unicode rendering (particularly with multi-codepoint graphemes, see [1]), and in general misbehaves in other myriad ways [2][3][4].

With both Ghostty and iTerm2 now freely available, there's really no reason to use Terminal.app.

[1]: https://mitchellh.com/writing/grapheme-clusters-in-terminals

[2]: https://github.com/neovim/neovim/issues/26093

[3]: https://github.com/neovim/neovim/issues/28776

[4]: https://github.com/neovim/neovim/pull/28453