Control + W shortcut not working in Finder and Terminal I set CtrlW as a shortcut for all applications in the System Preferences => Keyboard => Shortcuts.

They are working in many apps (like Safari), but not in Terminal and in Finder.

Is CtrlW a system shortcut?

I shouldn't have conflicts with other shortcuts with the same combination of keys, the yellow warning triangle is not shown.
ControlW is an assigned shortcut in Bash. Notice, I said, Bash and not "Terminal" - basically it's present across all systems from Linux, BSD, macOS and Unix.

ControlW is "delete word."  It's similar to the  ⌫ Delete (aka Backspace) except it deletes an entire word.  

For more info on keyboard shortcuts see:  https://ss64.com/bash/syntax-keyboard.html