Hi!
We have decided to change the encoding, so that the encoding of the sitelink above would be /wiki/Category:Stuffed_animals. The encoding now should match how titles are encoded in Mediawiki codebase (non-ASCII characters that Mediawiki encodes will still be encoded as before).
Heads up: this change now has been merged but not deployed yet. It will be deployed in the next regular Wikidata deployment.
Thanks,