Rails 3.2.6, Ubuntu; After switch from 171 to 174 start receiving exception:
'incompatible character encodings: ASCII-8BIT and UTF-8' through the app;

One of the cases, tmp.html.erb:

<%
str = "始"
str.encoding   #=> UTF-8
str.html_safe  #=> exception: 'incompatible character encodings: ASCII-8BIT and UTF-8'
%>