This is no answer, just some more illustrative material triggered by the numberlist of @Stefan Kohl.
I consider the numbers $m$ from Stefan's list in base-4 representation.
By that representation the iterations exhibit some much simplified pattern: if the last digit is "1" subtract and square, otherwise simply cut that digit.
This reduces to two operations on some number $m$:
- $f(m)$: cut all trailing digits in base-4-representation of $m$ after the last "1" ; return(m)
- $g(m)$: do $m = (m-1)^2$; do $m = f(m)$ ; return(m)
In the following table I document the initial $f(m)$-transform and then the first couple of transforms by $g(m)$. (Note that a lot(!) of iterations of the original description are thus hidden).
The data found in the table reduce to only two systematic patterns which are able to decrease to zero.
--- m=65533 '33333331'_4 ------------------
33333331
33333320000001
3333330000001
333332000001
33333000001
3333200001
333300001
33320001
3330001
332001
33001
3201
301
21
1
--- m=65541 '100000011'_4 ------------------
100000011
100000020000001
10000010000001
1000002000001
100001000001
10000200001
1000100001
100020001
10010001
1002001
101001
10201
1101
121
21
1
--- m=131065 '133333321'_4 ------------------
133333321
33333320000001
3333330000001
333332000001
33333000001
3333200001
333300001
33320001
3330001
332001
33001
3201
301
21
1
--- m=131069 '133333331'_4 ------------------
133333331
333333300000001
33333320000001
3333330000001
333332000001
33333000001
3333200001
333300001
33320001
3330001
332001
33001
3201
301
21
1
--- m=131077 '200000011'_4 ------------------
200000011
1000000100000001
100000020000001
10000010000001
1000002000001
100001000001
10000200001
1000100001
100020001
10010001
1002001
101001
10201
1101
121
21
1
--- m=131081 '200000021'_4 ------------------
200000021
100000020000001
10000010000001
1000002000001
100001000001
10000200001
1000100001
100020001
10010001
1002001
101001
10201
1101
121
21
1
--- m=262129 '333333301'_4 ------------------
333333301
33333320000001
3333330000001
333332000001
33333000001
3333200001
333300001
33320001
3330001
332001
33001
3201
301
21
1
--- m=262132 '333333310'_4 ------------------
33333331
33333320000001
3333330000001
333332000001
33333000001
3333200001
333300001
33320001
3330001
332001
33001
3201
301
21
1
--- m=262134 '333333312'_4 ------------------
33333331
33333320000001
3333330000001
333332000001
33333000001
3333200001
333300001
33320001
3330001
332001
33001
3201
301
21
1
--- m=262135 '333333313'_4 ------------------
33333331
33333320000001
3333330000001
333332000001
33333000001
3333200001
333300001
33320001
3330001
332001
33001
3201
301
21
1
--- m=262137 '333333321'_4 ------------------
333333321
333333300000001
33333320000001
3333330000001
333332000001
33333000001
3333200001
333300001
33320001
3330001
332001
33001
3201
301
21
1
--- m=262141 '333333331'_4 ------------------
333333331
3333333200000001
333333300000001
33333320000001
3333330000001
333332000001
33333000001
3333200001
333300001
33320001
3330001
332001
33001
3201
301
21
1
--- m=262149 '1000000011'_4 ------------------
1000000011
10000000200000001
1000000100000001
100000020000001
10000010000001
1000002000001
100001000001
10000200001
1000100001
100020001
10010001
1002001
101001
10201
1101
121
21
--- m=262153 '1000000021'_4 ------------------
1000000021
1000000100000001
100000020000001
10000010000001
1000002000001
100001000001
10000200001
1000100001
100020001
10010001
1002001
101001
10201
1101
121
21
1
--- m=262161 '1000000101'_4 ------------------
1000000101
100000020000001
10000010000001
1000002000001
100001000001
10000200001
1000100001
100020001
10010001
1002001
101001
10201
1101
121
21
1
--- m=262164 '1000000110'_4 ------------------
100000011
100000020000001
10000010000001
1000002000001
100001000001
10000200001
1000100001
100020001
10010001
1002001
101001
10201
1101
121
21
1
--- m=262166 '1000000112'_4 ------------------
100000011
100000020000001
10000010000001
1000002000001
100001000001
10000200001
1000100001
100020001
10010001
1002001
101001
10201
1101
121
21
1
--- m=262167 '1000000113'_4 ------------------
100000011
100000020000001
10000010000001
1000002000001
100001000001
10000200001
1000100001
100020001
10010001
1002001
101001
10201
1101
121
21
1
--- m=524257 '1333333201'_4 ------------------
1333333201
33333320000001
3333330000001
333332000001
33333000001
3333200001
333300001
33320001
3330001
332001
33001
3201
301
21
1
--- m=524260 '1333333210'_4 ------------------
133333321
33333320000001
3333330000001
333332000001
33333000001
3333200001
333300001
33320001
3330001
332001
33001
3201
301
21
1
--- m=524262 '1333333212'_4 ------------------
133333321
33333320000001
3333330000001
333332000001
33333000001
3333200001
333300001
33320001
3330001
332001
33001
3201
301
21
1
--- m=524263 '1333333213'_4 ------------------
133333321
33333320000001
3333330000001
333332000001
33333000001
3333200001
333300001
33320001
3330001
332001
33001
3201
301
21
1
--- m=524273 '1333333301'_4 ------------------
1333333301
333333300000001
33333320000001
3333330000001
333332000001
33333000001
3333200001
333300001
33320001
3330001
332001
33001
3201
301
21
1
--- m=524276 '1333333310'_4 ------------------
133333331
333333300000001
33333320000001
3333330000001
333332000001
33333000001
3333200001
333300001
33320001
3330001
332001
33001
3201
301
21
1
--- m=524278 '1333333312'_4 ------------------
133333331
333333300000001
33333320000001
3333330000001
333332000001
33333000001
3333200001
333300001
33320001
3330001
332001
33001
3201
301
21
1
--- m=524279 '1333333313'_4 ------------------
133333331
333333300000001
33333320000001
3333330000001
333332000001
33333000001
3333200001
333300001
33320001
3330001
332001
33001
3201
301
21
1
--- m=524281 '1333333321'_4 ------------------
1333333321
3333333200000001
333333300000001
33333320000001
3333330000001
333332000001
33333000001
3333200001
333300001
33320001
3330001
332001
33001
3201
301
21
1
--- m=524285 '1333333331'_4 ------------------
1333333331
33333333000000001
3333333200000001
333333300000001
33333320000001
3333330000001
333332000001
33333000001
3333200001
333300001
33320001
3330001
332001
33001
3201
301
21
--- m=524293 '2000000011'_4 ------------------
2000000011
100000001000000001
10000000200000001
1000000100000001
100000020000001
10000010000001
1000002000001
100001000001
10000200001
1000100001
100020001
10010001
1002001
101001
10201
1101
121
--- m=524297 '2000000021'_4 ------------------
2000000021
10000000200000001
1000000100000001
100000020000001
10000010000001
1000002000001
100001000001
10000200001
1000100001
100020001
10010001
1002001
101001
10201
1101
121
21
--- m=524305 '2000000101'_4 ------------------
2000000101
1000000100000001
100000020000001
10000010000001
1000002000001
100001000001
10000200001
1000100001
100020001
10010001
1002001
101001
10201
1101
121
21
1
--- m=524308 '2000000110'_4 ------------------
200000011
1000000100000001
100000020000001
10000010000001
1000002000001
100001000001
10000200001
1000100001
100020001
10010001
1002001
101001
10201
1101
121
21
1
--- m=524310 '2000000112'_4 ------------------
200000011
1000000100000001
100000020000001
10000010000001
1000002000001
100001000001
10000200001
1000100001
100020001
10010001
1002001
101001
10201
1101
121
21
1
--- m=524311 '2000000113'_4 ------------------
200000011
1000000100000001
100000020000001
10000010000001
1000002000001
100001000001
10000200001
1000100001
100020001
10010001
1002001
101001
10201
1101
121
21
1
--- m=524321 '2000000201'_4 ------------------
2000000201
100000020000001
10000010000001
1000002000001
100001000001
10000200001
1000100001
100020001
10010001
1002001
101001
10201
1101
121
21
1
--- m=524324 '2000000210'_4 ------------------
200000021
100000020000001
10000010000001
1000002000001
100001000001
10000200001
1000100001
100020001
10010001
1002001
101001
10201
1101
121
21
1
--- m=524326 '2000000212'_4 ------------------
200000021
100000020000001
10000010000001
1000002000001
100001000001
10000200001
1000100001
100020001
10010001
1002001
101001
10201
1101
121
21
1
--- m=524327 '2000000213'_4 ------------------
200000021
100000020000001
10000010000001
1000002000001
100001000001
10000200001
1000100001
100020001
10010001
1002001
101001
10201
1101
121
21
1
Another try with numbers near the odd powers of $\sqrt2$: $x_k=\sqrt 2 ^k $ where $k=2j+1$. Let $a_k=\lfloor x_k \rfloor $ and $b_k=\lceil x_k \rceil $ the two neighboured integers.
I expected, that in cases where $x_k$ is "extremely" near to one of the bounds we have possibly special behaviour, like for instance if $m=a_{15} = 181$ and indeed this value seems to have a divergent trajectory while for $k$ in the near of that the trajectories approach zero. Unfortunately it seems that this is not so significant as expected; for $k>80$ I didn't find any convergent trajectory at all.
Here is some part of the table:
Part 1: take that number of $a_k$ and $b_k$ which is odd as argument $m$:
these converge:
k=7 m=11------------------
23
121
21
1
k=9 m=23------------------
11
1
k=11 m=45------------------
231
1321
3201
301
21
1
k=13 m=91------------------
11
1
this doesn't seem to converge
k=15 m=181------------------ ( likely divergent !)
2311
133221
33220021
3310030322001
3220330213031221021
31033320111230303300302001313223101
223320031033333201331222232232023120303121021311312301030210223221
these converge
k=17,19,21,23,25,27,29,35,39,47,55,63,67,71
k=75 m=194368031999 ------------------
2311001
13333321
333332000001
33333000001
3333200001
333300001
33320001 --- known convergent pattern
these don't seem to converge:
k=31,33,37,41,43,45,49,51,53,57,59,61,65,69,73,77... 255
For the selections of the even number of $a_k$ and $b_k$ we have a similar picture.
Part 2: take that number of $a_k$ and $b_k$ which is even as argument $m$:
these converge
k=7 m=12 ---------------
30
1321
3201
301
21
1
k=9 m=22 ---------------
11
1
k=13 m=90 ---------------
11
1
k=15 m=182 ---------------
231
1321
3201
301
21
1
these converge too
k=17,21,25,29,31,33,37,43,51,59,75,79
k=83 m=3109888511976 ---------------
2311001
13333321
333332000001
33333000001
3333200001
333300001
33320001 // this is known to be a convergent pattern
These don't seem to converge
k=11,19, 23, 27, 35,39,41,45 .. 49,53 ..57 ,61..73 ,77, 81 ,85 ...255