802.1X PEAP fails when using special characters in login

I am using MS AD & NPS for 802.1X Enterprise authentication with PEAP (no client certificate - MS-CHAPv2 user credentials for login). This works fine for iOS devices on 8.1 (iPhone 5 and iPad mini) and 6.1.6 (iPhone 3GS) when the user has standard "English" ASCII characters in the username and password.

However, when I introduce Unicode special accented characters in the login name or password such as French é/ù or Spanish ñ then after accepting the server cert authentication fails with "Incorrect username or password for <WLAN name>". Windows 7 and CentOS 6.5 laptops have no problem authenticating to the same setup with either "English" credentials or ones with special accented characters. I also tried an old iPod touch on ancient software version and that fails, so its not something recently introduced.

I tried using a different access point (TP-Link instead of Ruckus) and had exactly the same issue, so highly unlikely this is an AP issue.

Then I setup FreeRadius with and see exactly the same issue, so its highly unlikely to be a MS AD/NPS issue.

When comparing a working/failed authentication Wireshark packet capture on the NPS server, I see the failed attempt is missing the last 4 packets in the authentication exchange. The last packet sent is an Access-Challenge from the NPS server and no response from the iOS device, so the NPS server never even sends an Access-Reject. The iOS device appears to have decided it can't resolve the special characters and terminates the authentication attempt.

To me this seems to be an Apple iOS software deficiency when using Unicode special characters in the username or password for 801.2X authentication?