The effect can be seen with examples/fo/basic/pdfoutline.fo. As soon as PDF encryption is activated the texts in the outline are garbled. Redesign/HEAD works, only maintenance branch is affected.
The reason for the garbled text is the lack of encryption on string objects as they occur in outline objects in PDF. In HEAD it took quite a bit of refactoring to get it right. If someone wants to fix it you can look at PDFObject.encodeText() and PDFOutline.toPDF() in HEAD for reference.
Bug fixed in latest Trunk (rev 584703), and probably in FOP 0.94
batch transition pre-FOP1.0 resolved+fixed bugs to closed+fixed