Obviously, this forum software also has a similar problem, and double-escaping doesn’t seem to help. I’ll try to explain the problem more closely:
I use numeric character references (and other HTML stuff) in the title of my post, e.g. the concatenation of ‘foo’, an ampersand character, ‘#xa0;bar’. The problem is that this is displayed verbatim by wp_title (but not by the_title), and not as ‘foo’ followed by a hard space followed by ‘bar’. How can I fix this? It really feels more like a bug than a feature.