The compiler seems to not handle the unicode BAS filename. Like ALREDY SQUARE WIÐ BETT QUOTIETNS.BAS – the results, which are being instructed to go to a .TXT with “>” command, output the Ð as a question. The compiler thinks it fulfilled the first level. And then it looks for the .ASM, but can't find it. This TXT too, appears as 1-byte text, not unicode. (The system is .XP with all NTFS.)
It's true, fbc currently uses FB's String and Open, while to support Unicode on Windows it would have to use WStrings and a wstring-version of Open which doesn't exist yet in the FB runtime.
The main problem with that is that it's essentially Windows-only; thus fbc.bas and some other parts of the compiler sources would have to be written such that they use WString/UTF16 filenames on Windows and String/UTF8 filenames elsewhere. That's probably easy but still a massive change.