I am familiar with UTF-8, but I am at a loss for what "Display as UTF-8" means. UTF-8 is a character encoding, which should govern how input bytes are converted to font glyphs, but I'm not sure how that impacts the end user, unless this means something like "interpret file bytes as UTF-8", which is not really a display issue.
I did try it. I had a single line of text, which was Greek text pasted in, and was displaying as accented Latin vowels. After I chose "Display as UTF-8", it converted it to a single Chinese character (nu, the character for woman) followed by a tiny tall and thin hollow box.
Possibly whatever it did to the Greek letters resulted in a binary stream in the buffer which happens to correspond to the UTF-8 encoding for the Chinese character nu3 ?