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It seems to only like plain Latin-1:

http://en.wikipedia.org/wiki/Special:Export?action=submit&curonly=true&pages=%E6

This is especially confusing when Meta rejects Latin-1 but accepts UTF-8.

In 1.3 it accepts only the native encoding of the wiki.

If this is about it only accepting %E6 and not %C3%86 as Æ then yeah, that's
normal, different codepoints mean different things in different character sets,
marking it as INVALID.