> - encoding - even if your file is not utf-8, why would that matter? You would still run the patch algorithm the same way. It doesn't really matter if the characters are valid utf-8

Yeah I don't see a use-case for a patch encoding either - just treat the patch data as ascii-delimited binary mistery goo. Patch files need to be able to deal with mixed encoding text (e.g. to fix it) so you can't really just have one encoding anyway.