There are still cases where the encodingErrorPolicy = "replace" but invalid characters are not being replaced with the special character. There is an example of the replacement working correctly in the test "encodingErrorReplace", but this is not consistently working.

See failing tests in:
daffodil-test/src/test/scala-debug/edu/illinois/ncsa/daffodil/section11/content_framing_properties/TestContentFramingPropertiesDebug.scala
daffodil-test/src/test/resources/edu/illinois/ncsa/daffodil/section11/content_framing_properties/ContentFramingProps.tdml

Working test located in:
daffodil-test/src/test/scala/edu/illinois/ncsa/daffodil/section11/content_framing_properties/TestContentFramingProperties.scala