🚀 go-pugleaf

 >    'talk', 'write', 'wall', and other programs which expect to write
 >	on a user's tty are now set-GID to group "tty".
 >    'login' sets the mode of a user's tty to be group-writable but not
 >        world-writable when the user logs in.
 >    'in.telnetd' sets the group-ownership of the pty it's been using to
 >	GID 0 ("wheel") on exit.
 >
 >The first two above are apparently to keep random users from writing to
 >your screen except through "approved" channels (which must now be set-GID
 >to group "tty").

Exactly.  Those changes come from 4.3BSD.

 >Unfortunately, 'login' doesn't check this, it just assumes it to be
 >true.

Not true.  I just tried it on a 4.0 system, and it not only changed the
owner of the pseudo-tty on which I telnetted in to me, it changed the
group owner to group "tty".  I checked the 4.3BSD code (from which the
SunOS code is derived), and it does, indeed, attempt to change the group
ownership of the tty to group "tty". 

Now, if the "getgrnam" in "login" (or, at least, the 4.3BSD version of
same) that tries to look up group "tty" in order to find its group ID
fails, it changes the group owner to the user's "default group" (the one
in the password file) instead; perhaps "/etc/group", or the YP map for it,
is missing a "tty" entry or is inaccessible?

 >The problem is, 'in.telnetd'...sets the group ownership of the pty it
 >was using to GID 0 apparently in a misguided attempt to "clean
 >up" after itself.

If you think it's misguided, I suggest you talk to the 4.xBSD folks at
Berkeley about it, since not only does the 4.3BSD version do this, the
4.3-tahoe version does as well, so as of when they did the 4.3-tahoe
version, they didn't consider it misguided.  Asking Sun to change it may
result in it being changed in SunOS, but not in 4.xBSD nor in systems
other than SunOS that have gotten "telnetd" (or "rlogind" for that matter
- it does the same thing) from 4.xBSD....