German Umlaut characters display incorrectly in diff view

Problem description:

In some cases, based on the file content (aka file encoding), Bitbucket server displays the Umlaut and other non-ASCII characters as either a diamond <?> or another character found in the Russian alphabet. The <?> is usually seen when a non UTF-8 file encoding such as Latin 1 is used without diff transcoding. The incorrect character is normally seen when diff transcoding is on.

How to reproduce:

Push the attached repo to bitbucket server and view the diff between master and the german-changes branch.

Things to be mindful of

1. Git offers a RAW mode for some commands which can simplify line ending problems
2. Encoding detection should be done once per file
3. I had to pass iconv the '-c' option to force it to skip conversion of the euro sign in the file.