Thanks for digging into it some more.
The covers/books are inaccessible from all browsers, Safari/Safari(ios), Firefox, Chrome, etc. That said, the escaping/unescaping behavior does vary. Chrome and Firefox converts it back to actual single quote, safari leaves it as %27.
I can access the books just fine when I manually go the the actual filesystem path URL with a quote, it's just when the quote is used through php that it breaks - somehow the directory checks done by php fail when there is a single quote included. This causes the generic cover to be used as an alternate and the book itself can't be downloaded at all.
I'm thinking perhaps you can't reproduce because there is something different in 5.3 - it does appear some string handling changes were made, maybe this got fixed in the process.