I'm still curious if any GNU/Linux wizards know why the original method was not working. Either way it is working now.
Because runcommand needs a terminal to show the launch menu, launching ES directly would break this. On Debian and friends, you can use x-terminal-emulator as the terminal starting command, which would be expanded to one of the installed terminal emulators.
If not: I would run ssh -v pi@<address>, it should give you a hint.
If you are still puzzled: Mount the SD card of the clone in your Mac, look for a file /etc/hostname. Edit the file and change the hostname to something different e.g rpi-clone. Boot your Rpi with this SD card and try SSH'ing again.
If by "Arcade Mode" you mean EmulationStation then:
Pressing F4 will exit EmulationStation and drop you to the Terminal. Or you could use the ES main menu by pressing "Start" and selecting "Quit" and then "Quit EmulationStation".
If you bought a custom premade image then I have no idea what software you're using and only the original seller can help you,
Is it a keyboard with a Fn key? Make sure capslock and numlock are off, some of them have a Fn lock ya know. Also retropie uses UK default so it is a good idea to change now to US using raspi-config if you use that layout.
@meleu@cyperghost The export did the trick. It works now and doesn't break the other menu controls. 😄 Thank you for all the effort and explanations. I learned a lot today, as may others who stumble upon this thread, too.
I edited my opening post to a mere reference to @meleu's solution. 😌
Edit: I had something here about killing Joy2key, but after reading your post more carefully, it wouldn't apply. I'm not sure keyboard input can be ignored here. I assume you know that the Runcommand menu can be deactivated altogether.