The following IRI
- Doesn't work. Page edited with NVU, href attibute contains "b%C3%A4cker"

The following
- Works. Page (re)edited with text editor like emacs or Xcode; href attribute contains "bäcker"

It is worth to note that in the first case Safari ends up with a paradoxal message: (Safari cannot open the page "http://bä" because the server "" is not found.)