UTF-16 files are corrupt on transfer

When transferring files using SFTP protocol from CentOS machine to local (windows 7), the file is corrupted by what appear to be off-by-one errors on odd lines of the file.

What was:
<?xml version='1.0' encoding='UTF-16'?>
<!DOCTYPE dmodule [
<!ENTITY % ISOEntities PUBLIC "ISO 8879-1986//ENTITIES ISO Character Entities 20050501//EN//XML" "isoents.ent">
%ISOEntities;]>

Becomes:

<?xml version='1.0' encoding='UTF-16'?>
਍㰀℀䐀伀䌀吀夀倀䔀 搀洀漀搀甀氀攀 嬀 ഀഀ
<!ENTITY % ISOEntities PUBLIC "ISO 8879-1986//ENTITIES ISO Character Entities 20050501//EN//XML" "isoents.ent">
਍─䤀匀伀䔀渀琀椀琀椀攀猀㬀崀㸀ഀഀ

This is seen on v4.3.4 and v5.0.7.

FileZilla does not have this issue.

Can you send me an email, so I can send you back a debug version of WinSCP to track the problem? Please include link back to this topic in your email. Also note in this topic that you have sent the email. Thanks.

This issue is being tracked already:
https://winscp.net/tracker/521