Dear jo , this is my first attempt.
From the client side it seems to work, I can telnet , insert my user , then it request my password and it seems similar to original shell. But when trying from legitimate telnet client it does not.
Im also thinking the idea of creating a real linux server with telnet login and then redirect telnet daemon to a custom script (like a pseudo shell). I need to find out all pieces and make them work togheter.
This is my perl telnet server:

 
 #!/usr/bin/perl -w
 use IO::Socket;
 use Net::hostent;              # for OO version of gethostbyaddr

 $PORT = 9000;                  # pick something not in use
$prompt="MA5680T>";

 $server = IO::Socket::INET->new( Proto     => 'tcp',
                                  LocalPort => $PORT,
                                  Listen    => SOMAXCONN,
                                  Reuse     => 1);

 die "can't setup server" unless $server;
 print "[Server $0 accepting clients]\n";

 while ($client = $server->accept()) {
   $client->autoflush(1);
   #print $client "Welcome to $0; type help for command list.\n";
   #$hostinfo = gethostbyaddr($client->peeraddr);
   #printf "[Connect from %s]\n", $hostinfo->name || $client->peerhost
+;
   print $client "\n";
   print $client "Warning: Telnet is not a secure protocol, and it is 
+recommended to use Stelnet.";
   print $client "\n";
   print $client "\n";
   print $client ">>User name:";
   while ( <$client>) {
     next unless /\S/;       # blank line
     print "\nlinea :$_";

     if    (/quit|exit/i)    { last;                                  
+   }
     elsif (/leo/i)    { printf $client "\n>>User password:";  }
     elsif (/password/i)    { printf $client "\n$prompt"; }
     else {
       print $client "\n$prompt";
     }
   } continue {
     #print $client $prompt;
   }
   close $client;
 }
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Regards, Leandro