Thanks for the tip, updated WinRAR to latest version and found the option "Names encoding" in Options menu. Chose code 65001 (UTF-8) and names load properly. Interestingly, none of GBK/CP437/Shift-JIS worked - possibly due to OS / platform differences.
WinRAR claims on its homepage that it is the only compression software that supports Unicode
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Based on other forums (7z, zip), unless the code page (CP437/Shift-JIS/etc.) is known which was used for zipping, it will be difficult to decode. The default code page used depends on characters in file names, OS, system architecture (LE/BE) and system locale setting.
Pixeldrain uses a parser based in Svelte language which seems to decode names correctly. Programming languages are developed to be cross-platform, so not surprised. Thanks for sharing this hint, helped research.
Anyways, still wonder why compression utilities don't have a uniform mechanism to retain proper encoding cross-platform and only newer versions of WinRAR have an option to tinker in this respect.