Reduced test case:
[subbu@earth:~/work/wmf/parsoid] cat /tmp/wt
*<div>{{1x|
*c
}}</div>d
[subbu@earth:~/work/wmf/parsoid] php bin/parse.php --wt2wt < /tmp/wt
*<div>{{1x|
*c
}}</div>dd
[subbu@earth:~/work/wmf/parsoid] php bin/parse.php < /tmp/wt
<ul about="#mwt1" typeof="mw:Transclusion" data-parsoid='{"dsr":[0,24,0,0],"firstWikitextNode":"UL","pi":[[{"k":"1"}]]}' data-mw='{"parts":["*<div>",{"template":{"target":{"wt":"1x","href":"./Template:1x"},"params":{"1":{"wt":"\n*c\n"}},"i":0}},"</div>d"]}'><li><div></div></li>
<li>c<meta typeof="mw:Placeholder/StrippedTag"/></li></ul><span about="#mwt1">
</span><p data-parsoid='{"dsr":[24,24,0,0]}'>d</p>The list has got offset [0,24] whereas it should be [0,23]. If that 'd' was a multi-byte character, then template wrapping would try to take a substring in the middle of the character causing it to trigger a UTF-8 error.
See below:
[subbu@earth:~/work/wmf/parsoid] cat /tmp/wt
*<div>{{1x|
*c
}}</div>の
[subbu@earth:~/work/wmf/parsoid] php bin/parse.php < /tmp/wt
Wikimedia\Assert\InvariantException from line 224 of /home/subbu/work/wmf/parsoid/vendor/wikimedia/assert/src/Assert.php: Invariant failed: Bad UTF-8 at end of string (3 byte sequence)
#0 /home/subbu/work/wmf/parsoid/src/Utils/PHPUtils.php(218): Wikimedia\Assert\Assert::invariant()
#1 /home/subbu/work/wmf/parsoid/src/Wt2Html/PP/Processors/WrapTemplates.php(963): Wikimedia\Parsoid\Utils\PHPUtils::safeSubstr()
#2 /home/subbu/work/wmf/parsoid/src/Wt2Html/PP/Processors/WrapTemplates.php(1226): Wikimedia\Parsoid\Wt2Html\PP\Processors\WrapTemplates::encapsulateTemplates()
#3 /home/subbu/work/wmf/parsoid/src/Wt2Html/PP/Processors/WrapTemplates.php(1239): Wikimedia\Parsoid\Wt2Html\PP\Processors\WrapTemplates::wrapTemplatesInTree()
#4 /home/subbu/work/wmf/parsoid/src/Wt2Html/DOMPostProcessor.php(158): Wikimedia\Parsoid\Wt2Html\PP\Processors\WrapTemplates->run()
#5 /home/subbu/work/wmf/parsoid/src/Wt2Html/DOMPostProcessor.php(837): Wikimedia\Parsoid\Wt2Html\DOMPostProcessor->Wikimedia\Parsoid\Wt2Html\{closure}()
#6 /home/subbu/work/wmf/parsoid/src/Wt2Html/DOMPostProcessor.php(887): Wikimedia\Parsoid\Wt2Html\DOMPostProcessor->doPostProcess()
#7 /home/subbu/work/wmf/parsoid/src/Wt2Html/DOMPostProcessor.php(904): Wikimedia\Parsoid\Wt2Html\DOMPostProcessor->process()
#8 /home/subbu/work/wmf/parsoid/src/Wt2Html/ParserPipeline.php(178): Wikimedia\Parsoid\Wt2Html\DOMPostProcessor->processChunkily()
#9 /home/subbu/work/wmf/parsoid/src/Wt2Html/ParserPipelineFactory.php(310): Wikimedia\Parsoid\Wt2Html\ParserPipeline->parseChunkily()
#10 /home/subbu/work/wmf/parsoid/src/Core/WikitextContentModelHandler.php(106): Wikimedia\Parsoid\Wt2Html\ParserPipelineFactory->parse()
#11 /home/subbu/work/wmf/parsoid/src/Parsoid.php(162): Wikimedia\Parsoid\Core\WikitextContentModelHandler->toDOM()
#12 /home/subbu/work/wmf/parsoid/src/Parsoid.php(194): Wikimedia\Parsoid\Parsoid->parseWikitext()
#13 /home/subbu/work/wmf/parsoid/bin/parse.php(327): Wikimedia\Parsoid\Parsoid->wikitext2html()
#14 /home/subbu/work/wmf/parsoid/bin/parse.php(584): Parse->wt2Html()
#15 /home/subbu/work/wmf/parsoid/tools/doMaintenance.php(53): Parse->execute()
#16 /home/subbu/work/wmf/parsoid/bin/parse.php(620): require_once('/home/subbu/wor...')
#17 {main}This is probably another source of UTF-8 production error logged in T269749: WrapTemplates: UTF-8 errors