I'm not sure I understand your question.
Maybe it's misunderstanding. WinSCP cannot convert an encoding of the file. The menu is to select in which encoding the file is, in case WinSCP auto-detection fails.
Though if you want to convert the encoding, you can cut whole file contents to a clipboard, save an empty file, switch the encoding to UTF-8 and paste the contents back and finally save the file again.
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