CobianSoft

It should be possible if ALL files in the folder are older but not if only some of them.

Do you mean, if the source structure is changed, scan then the destination for existing files? Is it not easier to delete the existing backup and force a new full backup plus normal incrementals then?

Install it as an application, not as a service

On your FTP destination select Advanced - Command encoding = UTF8

Since 1998.

Use UTF8 encoding for your FTP if it supports that feature.

I'm very intereted in reproducing this error somehow.

No, that shouldn't have happened.

You may be having "Absolute paths" enabled OR several sources with different roots in the same task.