When one uses set macmeta and attempts to reset it with set nomacmeta this does not reproduce the original behaviour of the alt/option key.
I'm not sure exactly what it does, but, for example, (Alt+a) ⌥+a should give å, but after one has toggled through set macmeta ⌥+a then gives á, and then if one toggles back to set nomacmeta it (in insert mode) takes the character under the cursor and moves it forward 4 characters (if there are 4 characters in the line) or moves it to the last character of the line. If it's already at the last character of the line it moves it to the last character of the next line. At this point, if you go into the command prompt with (by typing : in command mode) it will treat ⌥+a as å as it should.
I should mention that other key combinations (e.g.,⌥+s (ß),⌥+d (∂) and even ⌥+a+⇧(Å)) work without issue after this toggle (including in insert mode).