[KevinH]

And I can not recreate it in Sigil.

When I add and & #160; (without the space after the ampersand) to a nav entry and then tell it to generate an ncx, I get the following:

  <navPoint id="navPoint4">
    <navLabel>
      <text>Chapter 2: The Pool & #160; of Tears</text>
    </navLabel>
    <content src="Chapter-02.xhtml" />
  </navPoint>

[Again the above without the space after the ampersand].

That is exactly correct.

Then I replaced the nbsp in the nav with the actual nbsp char then recreated the ncx from it and ( if Preserve Entities has that nbsp included) you get the correct entity in the ncx.

Next I replaced the nbsp in the nav with the actual nbsp char, then changed the Preserve Entities to *not* preserve the nbsp, and then recreated the ncx, it was generated with the correct nbsp character (no entity).

So no bug here at all.

This is working exactly as designed.