You were right on this point, I see I remembered the terminology of this incorrectly.
http://www.unicode.org/versions/Unicode8.0.0/ch02.pdf figure 2.8 does use "encoded characters" for the mapping of abstract characters to its equivalent codepoint (s/ sequences). What I thought it meant is better described as a codepoint's byte output using an "encoding scheme".
An accurate description following that terminology, would be that Pharo/Squeak Strings keep data in UTF32 encoding form, where 1 codepoint = 1 code unit, dynamically switched between Latin1 (ByteStrings) and UTF32 (WideStrings) encoding schemes as needed.
With the same terminology, the difference between a code point, a code unit, how an encoding scheme represents a codepoint as code units/bytes, are the concepts it is important to distinguish.
Quite a mouthful though!
Cheers
Henry