This has finally been fixed in Ubuntu 17.10 by not installing xterm by
default.
Anyone that wants to use xterm is welcome to install it and it will have
its proper icon and .desktop launcher.
** Changed in: xterm (Ubuntu)
Status: Confirmed => Fix Released
** Changed in: ayatana-design
Status: New => Fix Released
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https://bugs.launchpad.net/bugs/129041
Title:
xterm icon available by default
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