Well, except that I actually meant to say "escaped" not "encoded" on #779 no it only addresses the output to the screen/terminal, as I said, the stored filenames are __intended__ to be escaped so they do not contain characters that cause problems for keyfiles when they are part of a list of items. In the [project] section paths are by themselves in an entry and so in practice they probably don't actually need escaping.
Which is why I only said technically all filenames should be escaped, it allows them to contain any Unicode character without caring what the encoding is. But since nobody seems to be doing that, its not broke, so don't fix it :)