Using an UTF-8 character in a category slug seems to cause issues.
After creating the category the admin gives a 404 and the category is inaccessible using the category link (/c/b%C3%A4r/6/l/latest.json?ascending=false)
Tested on 2.7.0.beta3. I think this is a regression?
We do quite a lot of extra work do deal with the encoded slugs when this site setting is enabled. I believe what we are missing is a validation that block you from setting this non-ascii slug manually without flipping the setting first?