Short answer: precoding.
Character encoding in XML does not affect the value of the "real" string length.
Quick test:
<?xml version="1.0" encoding="utf-8" ?>
<xsd:schema targetNamespace="http://tempuri.org/XMLSchema.xsd" elementFormDefault="qualified" xmlns="http://tempuri.org/XMLSchema.xsd" xmlns:xsd="http://www.w3.org/2001/XMLSchema">
<xsd:element name="root">
<xsd:simpleType>
<xsd:restriction base="xsd:string">
<xsd:maxLength value="2"/>
</xsd:restriction>
</xsd:simpleType>
</xsd:element>
</xsd:schema>
Valid XML :)
<?xml version="1.0" encoding="utf-8" standalone="yes"?>
<root xmlns:xsi="http://www.w3.org/2001/XMLSchema-instance" xmlns="http://tempuri.org/XMLSchema.xsd">&1</root>
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