I think this issue has nothing to do with Ark skin, not even with the current locale you're using in your site, but with some incorrect charset in your b2evolution database. Please see the image attached, I got no errors displaying special characters no tags.

Have you tried a different skin?

You so totally right.
The Boostrap skin has the same problem.
Something got corrupted somewhere, but I'm not sure where.
Moreover, when I retype the tag, it comes up correctly after save.
Any suggestions?
Thanks!

In system > maintenance > tools , there is a tool to normalize your DB charsest. please run it.

Thanks Francois. I had already done that.

I have corrected the problem manually.
The corrupted tags all had un underscore for points and accented characters which, after correction, now appear properly. Probably some strange conversion or upgrade issue rather than a DB problem...

I must say, the "tags" page is very useful for cleaning up and consolidating tags, although it would be nice if it did not jump back to page 1 after every save.
Thanks again for your attention.

Ok, feature request about paging duly noted.