This posting is on a really tricky Transform Binary stylesheet.
DataPower JSON processing with pre 220.127.116.11 firmwares is according to rfc4627.
And the spec only mentions UTF-x encodings in encoding section:
Customer had the problem that his input "JSON" was iso-8859-1 encoded and not spec compliant.
DataPower JSON to JSONx conversion correctly complained on that:
The workaround solution was using tricky iso-8859-1.2.utf-8.binary.xsl Transform Binary stylesheet.
It does conversion from iso-8859-1 to utf-8 WITHOUT escaping XML special characters "less than" and "ampersand".