From Mac OS X 10.3 to OS X 10.8, the Terminal application has always had a problem updating its tab text when disconnecting from an SSH server.
The tab text will update properly when connecting to an SSH server, but upon disconnecting, it will still show the FQDN of the server you were connected to.
Place the following in ~/.bash_profile to fix this:
export PROMPT_COMMAND='echo -ne "\033]0;${USER}@${HOSTNAME%%.*}"; echo -ne "\007"'
Now, re-source your .bash_profile, source ~/.bash_profile, or log out and log back into your shell for the changes to take effect.
