Select categories widgets does not properly handle   entities

We have found a minor regression of MDL-55564 which we stumbled upon while working on one of our plugins but which can also be seen on /admin/settings.php?section=enrolsettingsldap:

• There is a settings widget to display a list of categories. The content of the widget is fetched from make_categories_options() in /course/lib.php. The function returns a list of categories which is indented by

   

  entities.

• In 3.2, the list of categories is not correctly indented anymore because the

   

  entities arrive in the browser as

   

  (tested in theme_boost and theme_clean).

• According to davosmith who investigated this problem for us,

  the reason for the output is MDL-55564 - all the admin settings are now output via templates, which means that the code is automatically cleaned to escape any potentially bad characters (& < >). Unfortunately, this leads to the spaces becoming double-encoded in this case.

In our plugin, we will handle this problem as an intermediate solution by using

        $categories = make_categories_options();

        foreach ($categories as $id => $category) {

            $categories[$id] = html_entity_decode($category);

        }

before creating the settings widget (as a reference for the reviewer: https://github.com/moodleuulm/moodle-local_resort_courses/blob/master/settings.php#L64), but it would be nice if this problem could be investigated by Moodle HQ as the function make_categories_options() is designed to output the list indented, but the template rendering doesn't seem to be compatible anymore.

Thanks,
Alex