Okay, so after some discussion with the fine folks in #OpenBSD on Freenode, it looks like this is the reason for UTF-8 being disabled in GNU Screen on OpenBSD:
So perhaps in 3 or 4 years when they get around to releasing a new version, it can be enabled in OpenBSD again.
You can also create a hotkey which toggles disabling and enabling the local prefix so you can pass the keys through to the remote session.
I avoid nesting them, keep my keybinds enabled, and theme each session different colors. I ran a command on the wrong machine just enough times that I don't fully trust myself. :)
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