In fact, tcsh binds ^W to a different action (kill-region) than it does ^U (kill-whole-line). The binding is stolen from (X)Emacs. To use it, first set the "mark" somewhere in the line of text (hit C-space (^space) or C-@ (^@)), then go somewhere else and kill the region with C-w. Now you can use "yank", bound to C-y (^Y) to insert what you deleted.

When you start editing a line, mark is at the beginning of the line, which explains the behaviour Magenta complains about.