I don't think it's libxml2
The machine I build the packages on has libxml2 v2.7.8. And that machine does NOT exhibit the doubling behavior when Sigil is run on it. Non-breaking space treatment is consistent with the way Windows, OSX (and other tested Linux systems) behave.
The Wheezy I installed has a newer libxml2 v2.8.0 and DOES exhibit the behavior.
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