That's known problem with some strange installations of cygwin on Windows. I do not plan to implement any workaround. Have you tried using default bash? Or SFTP?

All remote file/folder names end with an extra line feed 0x0D
If I try and edit remote file filename.txt, I get an error message
can't create 'path-to-local-temp/filename.txt
'.
which confirms the extra 0x0D. Can it be fixed?

I run a minimal configuration:
- latest winscp in scp mode
- winxp sp2
- extra small cygwin sshd from <invalid hyperlink removed by admin>
- sh, and *nix commands from https://unxutils.sourceforge.net/ (win32 native port) - notice that sh.exe isn't cygwin's bash.exe

TIA
--sgp