This issue occurs when the server encoding of the database is not set to en_US.UTF-8.
This is a requirement for Cloud Director databases as specified in the Cloud Director Database documentation.
To resolve this issue, you will need to modify the server encoding to match the Cloud Director requirement of en_US.UTF-8.
This will require a new Cloud Director database to be created on the External PostgreSQL server.
To achieve this, follow the steps below:
Once complete, the backup and restore process should no longer fail due to server encoding issues.