Comment 7 for bug 1661691

Happening to me as well with TERM=xterm
Vim is set to "/etc/alternatives/vim -> /usr/bin/vim.basic", so "most normal" vim, no gvim or such.

Workarounds:
Note: inserting with "shift+insert" still gets the content of the mouse buffer you wanted to paste with the middle-button. Sometimes faster than disabling mouse.

Even more comfortable is this (from vim help):
        Note: When enabling the mouse in a terminal, copy/paste will use the
        "* register if there is access to an X-server. The xterm handling of
        the mouse buttons can still be used by keeping the shift key pressed.
        Also see the 'clipboard' option.

And I can confirm that with shift pressed middle-button paste as well as "mark to copy" works as it did in the past.