Pale Moon is a
web browser, not a
file browser.
Pale Moon will normally rely on http headers that indicate the encoding of a file. Obviously with a local plain text file those headers don't exist if there is no BOM (as RealityRipple pointed out).
Without such meta information available a file viewer will have to
guess.
Many text file editors use some brute-force logic to detect that a file is UTF-8 (e.g. by scanning for extended unicode characters in the first x bytes) if there is no start-of-file encoding signature. Since Pale Moon's normal operation is on the web where things like these are always having meta data attached in headers (or in the case of HTML in a html header
<meta> tag), it doesn't try to brute force detect but rather uses a default encoding setting for its language (which will be US_ASCII most likely, i.e. Western script code page)
If you would look at the console it would even tell you so.
The character encoding of the plain text document was not declared. The document will render with garbled text in some browser configurations if the document contains characters from outside the US-ASCII range. The character encoding of the file needs to be declared in the transfer protocol or file needs to use a byte order mark as an encoding signature.