It's odd. Opening the same file in Mp3tag in Windows (using the same portable installation) displays a normal ü.
It's also not a general issue. A different test album I tried displays ü, ß, á, é etc. normally.
Hexdump of the composed variant:
hexdump -C 08\ Die\ Sümpfe\ Der\ Traurigkeit.flac | grep Traurigkeit -B 2
000000b0 00 00 44 61 74 65 3d 31 39 38 34 21 00 00 00 54 |..Date=1984!...T|
000000c0 69 74 6c 65 3d 44 69 65 20 53 c3 bc 6d 70 66 65 |itle=Die S..mpfe|
000000d0 20 44 65 72 20 54 72 61 75 72 69 67 6b 65 69 74 | Der Traurigkeit|
Hexdump of the decomposed variant:
hexdump -C 01-01.flac | grep Kunststu -A 1 -B 1
00000050 76 66 36 32 2e 33 2e 31 30 30 19 00 00 00 54 49 |vf62.3.100....TI|
00000060 54 4c 45 3d 4b 75 6e 73 74 73 74 75 cc 88 63 6b |TLE=Kunststu..ck|
00000070 20 28 4c 69 76 65 29 0d 00 00 00 54 52 41 43 4b | (Live)....TRACK|
Mp3tag treats the decomposed version differently from the composed one.
To rule out my config I created a clean test installation of Mp3tag beside my configured portable one.
File that is displayed composed + file that is displayed decomposed:
filtering for ü doesn't show the decomposed form
filtering for the decomposed variant doesn't show the composed form
Mp3tag also retains the decomposed variant when saving (I appended 1 to the TITLE and saved the file, ü remains decomposed).
I can send you the problematic file/album if you're interested in investigating this.