When non-ascii characters appear in revision titles/summaries the patch and diff (to update) commands will fail on Windows systems. This often occurs due to “smart quotes” or "em—dash" characters being inserted into commit messages by editors on "user-friendly" operating systems like macOS.
This can be worked around by forcing all mercurial commands to use the global option --encoding utf-8 which applies for any mercurial command. This option was added in ~2006 so this should work across all supported versions of mercurial.
Refs T13649