I thought that's about user choosing UTF-8 as codepage in regional settings.

If it could be set in application manifest, that's a good thing.

Although I guess that in the end Windows will perform the save conversions in user32.dll, so it does not really matter.

Windows does allow setting it in the application's manifest but it also requires a registry setting to be enabled otherwise the manifest option is ignored. Obviously asking users to edit the registry is a non-starter so it's only used where the developers also control the user environment (e.g. the registry change is deployed through group policies, etc).

But yeah, this just tells Windows to do the conversion so that programmers don't have to type out the function calls themselves. It's simple enough to create a wrapper function for Windows API calls in any case.