You're not putting any data in. You're creating the XML using bytes, you're getting decoded data back from a method, exactly as documented.

This is what putting decoded data in means:

my ($container) = $dom->findnodes('/container');
my $n2 = $container->appendChild('XML::LibXML::Element'->new('node2'))
+;
$n2->appendText("\N{LATIN CAPITAL LETTER U WITH ACUTE}");
binmode *STDOUT, ':encoding(UTF-8)';
print $dom;
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