But please feel free to provide some actual test code that demonstrates the bug

Code that suffers from The Unicode Bug is code that returns different results for equal strings. This is easily demonstrated using the following:

my $s = "\x80\x80";
utf8::upgrade(   my $u = $s );
utf8::downgrade( my $d = $s );

is($u, $d);
is(utf8cut($u,2), utf8cut($d,2));
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better yet, show how you would've coded it to (at least in your view) "correctly" handle the different strings "\x80\x80" and "\N{U+80}\N{U+80}".

Perl considers those the same value, and any code that doesn't is by definition suffering from The Unicode Bug.