A guess... differences in mend on open or save settings? Sigil does treat the nbsp entity in a different manner from any other entities. Sigil gumbo parser used by mend will automatically put the nbsp named entity into the page if a real nbsp char is found on epub2. In epub3, gumbo/mend will always put a nbsp numeric entity if the nbsp char is found.
This is to prevent the nbsp characters from being converted to normal spaces when being processed in a QPlainTextEdit widget which happens due to a "design choice" in Qt (I would call it a huge bug but).
That said, I am still not sure about how that image you postedcomes about. Perhaps your preserve entities are messed up in the sigil.ini file, or ?
What happens if you right click on that page and run Mend? When the Preview auto updates, does it still have the same error message?
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