[dwdz]

The script works just fine on real Linux, it creates 2048 files and ls command lists them all with different names.

    ls -l win32/
    total 0
    -rw-r--r-- 1 dawid dawid 0 Feb 26 12:13 ''$'\355\277\237''.exe'
    -rw-r--r-- 1 dawid dawid 0 Feb 26 12:13 ''$'\355\267\213''.exe'
    -rw-r--r-- 1 dawid dawid 0 Feb 26 12:13 ''$'\355\240\220''.exe'
    -rw-r--r-- 1 dawid dawid 0 Feb 26 12:13 ''$'\355\274\273''.exe'
    -rw-r--r-- 1 dawid dawid 0 Feb 26 12:13 ''$'\355\251\205''.exe'
    -rw-r--r-- 1 dawid dawid 0 Feb 26 12:13 ''$'\355\255\223''.exe'
    -rw-r--r-- 1 dawid dawid 0 Feb 26 12:13 ''$'\355\272\257''.exe'
    -rw-r--r-- 1 dawid dawid 0 Feb 26 12:13 ''$'\355\264\207''.exe'
    -rw-r--r-- 1 dawid dawid 0 Feb 26 12:13 ''$'\355\261\246''.exe'
    -rw-r--r-- 1 dawid dawid 0 Feb 26 12:13 ''$'\355\254\266''.exe'
    ...

[feldrim]

Oh, great. Can you also share the locale? I'll write another Postscriptum section then.

[dwdz]

    LANG=en_IE.UTF-8
    LANGUAGE=en_IE:en
    LC_CTYPE="en_IE.UTF-8"
    LC_NUMERIC="en_IE.UTF-8"
    LC_TIME="en_IE.UTF-8"
    LC_COLLATE="en_IE.UTF-8"
    LC_MONETARY="en_IE.UTF-8"
    LC_MESSAGES="en_IE.UTF-8"
    LC_PAPER="en_IE.UTF-8"
    LC_NAME="en_IE.UTF-8"
    LC_ADDRESS="en_IE.UTF-8"
    LC_TELEPHONE="en_IE.UTF-8"
    LC_MEASUREMENT="en_IE.UTF-8"
    LC_IDENTIFICATION="en_IE.UTF-8"
    LC_ALL=

[rstuart4133]

Not the OP, but have you tried LANG=C and getting rid of the rest?