Comment by stockresearcher

The default collation on MS SQL Server didn’t support Unicode until some fairly recent releases. Even though the database itself fully supported Unicode (you just had to pick a different collation).

So it’s entirely possible that they are using a fully up-to-date database, but the software depends on using a database collation that doesn’t support Unicode. I’ve seen software like that in active use even now. It can definitely get frustrating, and it’s not that hard to fix if you can just get some management buyin.