Awesome that you found the root cause of the issue!
I have had seen such a charset issue many many years ago, and if I recall correctly (dusty), there was a setting at Paypal.com where there was a choice for the default charset, but their UI changed completely since them, . I had suggested at that time to Paypal to send IPNs in the same charset of the original payment by default.
I searched it up for you in their new UI, and funnily it's still in the old UI style.
Go to:
- Account Settings (in your name icon at top right)
- Products and Services -> "Website Payments" (left)
- "PayPal button language encoding" (click "Update")
- Now you are in the older style UI of Paypal
- "Your website language": I have "Western European languages (including English)"
- BUT: There, there is a small button: "More Options" below, click it!
- You will see there:
More Encoding Options
Use the following drop-down menu to select the encoding used on your website.
->> choose UTF-8
Encoding:
Do you want to use the same encoding for data sent from PayPal to you (e.g., IPN, downloadable logs, emails)?
Yes
No, use:
-> in the "No", choose UTF-8
-> but choose "Yes" and save.
What were the settings in your case for the Paypal account(s) which failed on non-US-ascii characters ?