Earlier quoted context omitted.
Yes!
How will you deal with valid paths such as: /tmp/[DE][AD][BE][EF].txt # ext2 / linux # OR C:\stuff\[DEED][FFFE].txt # ntfs / windows # where [hex] indicates a single filesystem charater with that value
Concerning character encodings, and potentially case sensitivity, the current high-level idea is that paths at the WASI syscall layer will be UTF-8, and WASI implementations will perform translation under the covers as needed. Of course, that doesn't fix everything, but it's a starting point.