Conversations involving multiple participants, allowing collaboration and information sharing in Teams
I have found that control-arrow keys has always worked, even when arrow keys by themselves do not.
It's not as convenient though. You can control-arrow over to near where the typo is, and press delete or backspace until you get to the error, and then fix the error and retype the rest of what was deleted.
But yes, this should be fixed. This is alpha-level non-functionality. A product should never go live that has this type of flaw.