Entering ψ into xfce-settings for closing a window, for example, shows zeta in the gui, and this is not purely a graphical bug.
Sorry for the duplicate comments. I meant to say sigma instead of Zeta. Further, bound a key to Sigma and there still was no window action.
Other binds work as expected (ie if I bind close window to backslash, it'll work quite fine) which implies that the bug is just some encoding error.
I have not tried editing the XML file and seeing if that reproduces the issue. If you'd like me to try (tbh I have and had trouble just figuring it out)