I don't get your problem. Maybe if you posted real code instead of a mishmash of unencoded and encoded entities outside of <code> tags, it would be clearer. The following code works as I expect it and seems to do what you want:

> perl -MHTML::Entities -le "print $HTML::Entities::VERSION; print enc
+ode_entities('&foo foo')"
1.35
&foo foo
[download]

Which would indicate to me that &foo foo does not look like any valid HTML entity.