[exim] SMTPUTF8 Authentication and logging

Hello there,
I have a new server which now has SMTPUTF8 enabled. I'm not sure why but
since then at least one Outlook client decided to stop using the IDN
form (xn--dmin-moa0i.example) and now tries to authenticate with the
UTF-8 domain. Researching this problem has led me to some questions:

1. How does exim handle UTF-8 in authentication data?

2. How does exim handle the logging of such information? I searched the
logfile and noticed that the authentication information is logged with
UTF-8 in octal:

(set_id=xyz@XXX\303\266nX\303\244XXX.xyz)

(X = replaced my me)

I tried the Exim documentation but couldn't find what I was looking for.

TIA,
Kai Bojens