Praefect migration failing on 14.7.4

Hi there, I hit a problem with upgrading GitLab EE from 14.6.4 to 14.7.4. I’m using Helm charts.

All resources spin up fine, but Praefect will enter a CrashLoopBackoff with this in logs:

praefect + /scripts/set-config /etc/gitaly/templates /etc/gitaly
praefect Begin parsing .erb templates from /etc/gitaly/templates
praefect Writing /etc/gitaly/config.toml
praefect Copying other config files found in /etc/gitaly/templates to /etc/gitaly
praefect + exec /scripts/exec-env /bin/sh -c '"/scripts/process-wrapper"'
praefect Starting Praefect
praefect Running migrations
praefect praefect sql-migrate: fail: simple protocol queries must be run with client_encoding=UTF8

I’ve found this PostgreSQL driver, that has exactly the same error message, which suggests to me that unless we have client_encoding set to UTF8, the migration will not hapen. Our PostresSQL is using SQL_ASCII at the moment.

Gitaly is up fine and not complaining. I know Helm tells me that Praefect is not ready for production and may need a manual intervention - is this one of those? Any advices, what would that intervention be? Dumping the database and importing it into a UTF8 enabled template?