In my humble opinion, non-English Latin characters (= letters with diacritics) cannot be treated exactly like Cyrillic or Japanese symbols.
First, say, Polish ogoneks are still regarded Latin. But the 26-letter alphabet is not Latin but English (note that "w" was never written in Latin, besides "j" and "u" were not used in classical times as well). Hence the term "non-English Latin characters".
Second, non-English Latin letters are not transliterated, and omitting all those strokes, ogoneks ("Ogonek" = "tail" is an official name of the diacritic seen in the Polish "ą", "ę") etc. is considered a spelling error, at least here in Poland. Telling the truth, spelling my surname which is Jagodziński as Jagodzinski (without the stroke above "n") may be considered offensive. I do not exaggerate!
Third, in countries where non-Latin writings are in use, Latin names are transliterated. Some time ago I was in Russia. In my visa, it was spelt "Ягодзиньский" (it is a kind of transcription, even not transliteration). So, if Cyrillic-writing countries can transcribe Latin names and it is all right, also Latin-writing counties can transcribe non-Latin names. It is a common practice and I feel good with it. But I do not understand why anybody should spelt Jagodzinski instead of Jagodziński. These are two, complete different problems.
Taking it all into consideration, I would persuade to place correctly-spelt soldier names written in the Latin alphabet in the game files. This post:
https://openxcom.org/forum/index.php?topic=159.msg35088#msg35088 has an attachment with 4 versions of correct Polish names that differ in size (you may choose one, or even use all of them). They work all right, at least on my computer. I have also tried to have done my best to correct the Czech file. In the current version, the one in the game, some name look really strange, i.e. Jioi instead of Jiří, and I just cannot have stood it... However, I cannot speak Czech, so there can still be errors in the file - my southern Slavic brothers, sorry fot it... Help in it if you can, please!
I cannot understand all those reservations concerning writing letters with diacritics, or reading foreign names. What do you need writing them for? But when using properly spelt names in the game you have no need to write them anywhere! It is the game which writes them for you (from its data files). And what concerns reading... It will not help you at all if you omit the strokes! For example, the well-known Polish surname Kościuszko (cf. a high mountain in Australia) is NOT pronounced even similarly to the accepted English pronunciation "Kuh-zee-uh-sko", it is more like "Kawshchooshkaw". It has nothing to do with the stroke above "s". If you are interested in the correct reading of foreign names, learn basics of particular languages rather. BTW, if you are interesting in Polish, be welcome to me personal website (
https://grzegorj.w.interia.pl/gram/en/fonemy1.html and
https://grzegorj.w.interia.pl/kurs/0.html) where you will find a very detailed guide to the Polish spelling and pronunciation with recorded examples (it is me who speaks).
I would really appreciate corrected soldier names in German, French, Slovak, Hungarian etc. (sorry that I have omitted other examples). It would be very nice if they were available, at least as an option for the player. All that is needed for it are corrected .nam files.