Re: What?

From all the posts (yours and other responses) I guess that you have to install
a (huge) package to introduce a layer between you and your shell, that all input
and output gets intercepted and transformed

No.

PS: *If* the package is effectively an intercepting layer I wonder how it will
pass functions that I use in my shell (e.g. Vi Editing Mode) to the shell.

I will only answer for Starship (I did not study the other tools deeply) and bash
(quite "standard"): Starship only relies on PROMPT_COMMAND, PS0, PS1 and PS2, so
once its prompt displaying is done, the shell is normal and gets its input as
usual. Same for the output of commands, it doesn't goes through Starship itself.

--
DW