iTerm2: Alt-Dot functionality with Cmd-Dot

Solution 1:

This looks like part of the EMACS readline bash key bindings i.e. they appear to be key combinations that are used in EMACS and emulated or add-ons to bash, or something. Mine work as yours do, unfortunately, but I have a workaround since you are speaking with respect to iTerm2:

Go into the Preferences for the profile of the Terminal session you'd like to inflict this upon, and establish the key-binding as illustrated thus:

This is probably not the solution that you are looking for, however it should work for you in a pinch.

Solution 2:

You simply need to modify the behavior of the Option key to achieve the desired result.

If you navigate to the Keyboard Behavior section of the Keys tab in the Profile setting, you'll see that the "Left/Right option (⌥) key acts as:" choices are set to "Normal" (as in the screenshot in Bill's answer). Update these to "+Esc" and apply.  Alt+. will now provide the last argument of the previous command.