I don't think it supports UTF8.
I think you mean UTF-8. UTF-8 is a character encoding. It's a means of converting characters to and from bytes for use in mediums that don't have a concept of characters.
HTML::Entities works with characters, not bytes that were characters before they were encoded. It doesn't know anything of any character encoding (like UTF-8) since it only works with characters.
The HTML portions you pass to decode_entities must first be decoded from bytes into characters (based on the encoding specified in the Content-Type header).
Similarly, the HTML portions you receive from encode_entities must then be encoded from characters into bytes to characters (based on the encoding specified in the Content-Type header).
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