Spacing error in Terminal
"nohillside" asked which encoding I had in the preferences. That was not the problem, but it showed me part of the problem.
Immediately below that preference is a checkbox for “Unicode East Asian Ambiguous characters are wide.” That label is misleading—if checked, all non-ASCII characters are wide (not merely East Asian Ambiguous).
The other part of the problem is that "wide" means that it adds a space to the output and the edit cursor movements count characters displayed while the edit position counts the actual characters.
I turned off that option (which I actually see no value in) and the bogus spaces are gone.