I have a lot of fun with slmenu, but I found two things a bit annoying.
1) I use slmenu e.g. for changing directories and I couldn't follow where I went, so I decided to complete the input first and then print the selected Text out (when hitting return).
2) slmenu doesn't close lines with a \n, so prompts a getting drawn a bit wired:
pascal at subiectiva in ~ % cd $(ls -1 -d */ | slmenu -p λ)
pascal at subiectiva in projects %
I applied my own version of your patch. I never thought of using slmenu inline in a terminal (but I like the idea!). You should have your desired bahavior now, as long as you don't specify -t or -b (i.e. -t/-b are for full-screen, curses apps, inline mode is the default).