The purpose of enabling and disabling UTF-8 encoding is specifically to change how mIRC interprets UTF-8 codepoints. When you disable UTF-8, you will be joining a different channel than when UTF-8 is on, if your channel name contains such codepoints. This is because mIRC is interpreting them differently, and it is intentional, not a bug.
This feature was added so that users could join non-UTF-8 channels. If you don't have that need, keep the option enabled and don't mess around with it. If you do have that need, then the behaviour you reported should speak for itself.