Apple - Delete key doesn't work in vim on iTerm2

This is a feature of vim, although IIRC it wouldn't be enabled by default.

backspace is a setting in vim, and you can set three different parameters: indent, eol, and start

If you run :help backspace, it will tell you:

Influences the working of `<BS>`, `<Del>`, `CTRL-W` and `CTRL-U` in Insert
mode.  This is a list of items, separated by commas.  Each item allows
a way to backspace over something:

value     effect
indent    allow backspacing over autoindent
eol       allow backspacing over line breaks (join lines)
start     allow backspacing over the start of insert; CTRL-W and CTRL-U
          stop once at the start of insert.

The one that isn't set for you is start.

If you add set backspace=indent,eol,start to your .vimrc, you'll be able to backspace over anything in insert mode.

I also had this, the natural text processing default values were wrong for me.

• MacBook Pro (15-inch, 2018)
• 10.14.3 (Mojave)
• Iterm2 3.2.7

Go to Preferences > Profiles > Keys and load the default preset Natural Text Editing and delete all entries that are about delete and delete behaviour. After that it works as expected.