This way, a real UTF-8 encoded playlist is created and Mp3tag can correctly detect and decode the special characters.
UTF-8 encoded w/o BOM (byte order mark) doesn't work for me, so the playlist must be encoded UTF-8 with BOM. This is easy to do with Notepad++. Simply open the UTF-8 encoded playlist in Notepad++ and then choose Encoding > Encode in UTF-8 with BOM.