> OK, please submit the patch with the necessary documentation, and
> please add a test for the original and the new behavior.

Where and how should this feature be tested?  I've found
test/manual/redisplay-testsuite.el for manual testing of xdisp.c
features, but also test/src/textprop.el for automated testing which
suggests test/src/xdisp.el might work out.  The only issue with
automatic testing here is that all ERT tests I've seen run in batch mode
which prevents `emacs --batch --eval "(princ (char-to-string ?\200))"`
from doing the right thing.

I've fixed the remaining points.