This is with `display-raw-bytes-as-hex' t.

> (What about printing it as "\u0080" instead? Only affects the C1 controls...)

\u0080 is a character, so that's something different than \200.

> Can't say my intuition is any more reliable. On the other hand,
> intuition says that counter-intuitive solutions are very attractive,
> but I think it's just trying to confuse us.

😀