The new release of IPython does not depend any more on readline but uses the pure Python library prompt-toolkit, solving maintenance problems on Apple\
You could change xterm's configuration.
xterm is configurable (and documented). In the xterm manual, the Default Key Bindings section shows the default binding for this key:
Alt Return:fullscreen() \n\
You can suppress that binding in more than one way:
omitTranslation resource to suppress the featurefullscreen resource to neverHowever, just suppressing it will not make it send something interesting (xterm ignores the modifier for Enter). Setting a translation resource works, e.g., in your $HOME/.Xdefaults file:
*VT100*translations: #override \n\
Alt Return: string("\033[27;3;13~")