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can you turn logging up to GEOTOOLS-DEV and see what the log has to say, you probably need to raise a bug report with a sample of the data or at least the names involvied along with a simple sld to test with
can you check in the SLD that the unicode is saved correctly - it's not clear from that error message what is getting the characters wrong. Do the changed names show up in the attribute list in the style editor tab?
I notice that the MySQL driver has been updated recently (github.com/geoserver/geoserver/pull/8088) so it may be worth upgrade to a recent nightly build and seeing if that fixes the issue.
I don't think there is any way to set the SRS when generating a point from text inside a SLD file. Have you tried just storing the locations in the data as geometries?