Incorrect encoding although code page is correct

Windows Terminal version

1.18.10301.0

Windows build number

10.0.19045.0

Other Software

PowerShell 7.4.1
Diagon (diagon.exe from diagon-1.1.156-win64.zip)

Steps to reproduce

This is an issue that occurs on Terminal but not Conhost.

Executing the command diagon Math -- "1+1/2 + sum(i,0,10) = 112/2" would output:

        10         
        ___        
    1   ╲       112
1 + ─ + ╱   i = ───
    2   ‾‾‾      2 
         0         

The output is correct on UTF-8 (65001) and would be broken on "Multilingual (Latin I)" (850).

When incorrect in encoding:

        10         
        ___        
    1   Ôò▓       112
1 + ÔöÇ + Ôò▒   i = ÔöÇÔöÇÔöÇ
    2   ÔÇ¥ÔÇ¥ÔÇ¥      2 
         0         

Expected Behavior

Output should be correct when encoding is UTF-8 (setting code page to 65001)

Actual Behavior

The output is incorrect on Terminal even when the encoding is UTF-8.
I have verified this with chcp and the code page is 65001

Screenshots for reference

Conhost (correct behaviour)

WIndows Terminal (incorrect behaviour)

Start by reproducing the Diagon command in Windows Terminal with code page 65001, then compare its output with Conhost using the same command. Trace the terminal's handling of the UTF-8 output and the Multilingual (Latin I) code page. Done means the UTF-8 output matches the expected characters in Windows Terminal, as it does in Conhost.