The ls command will by default escape the character into its numeric code if it thinks the character is invalid in your locale. I can get ls to print the same thing as you (using shell-escaped $'\303\251') *iff* I first export LC_ALL=C (which is not a UTF-8 locale and therefore cannot print unicode characters).
This indicates something is wrong with your locale, because at the very least, your shell cannot parse the character correctly -- maybe neither can libreoffice.
Man, can't thank you enough. You guided me to the issue. So, I tried what you said, but I couldn't modify LC_ALL at all - bash was complaining. If I echo it, I'd get back en_CA.UTF-8. I started wondering if there's an issue with locales since the install, so I figured I'll check /etc/locale.conf and regenerate them, and lo and behold - all locales were commented out. I uncommented en_CA.UTF-8, ran locale-gen, and now both `ls` and libreoffice work correctly. Thanks everyone on their time, both to read my questions and write out answers, and helping me fix this issue. -- "That gum you like is going to come back in style."