diff --git a/src/specify_cli/presets/__init__.py b/src/specify_cli/presets/__init__.py
index de4116228e..32d59a4b8b 100644
--- a/src/specify_cli/presets/__init__.py
+++ b/src/specify_cli/presets/__init__.py
@@ -5225,7 +5225,7 @@ def _find_in_subdirs(base_dir: Path) -> Optional[Path]:
                                         fm_strategy = fm_data.get("strategy")
                                         if isinstance(fm_strategy, str) and fm_strategy.lower() in VALID_PRESET_STRATEGIES:
                                             strategy = fm_strategy.lower()
-                        except (yaml.YAMLError, OSError):
+                        except (UnicodeDecodeError, yaml.YAMLError, OSError):
                             # Best-effort legacy frontmatter parsing: keep default
                             # strategy ("replace") when content is unreadable/invalid.
                             pass
diff --git a/tests/test_presets.py b/tests/test_presets.py
index dbf6ac4ccb..206196d71e 100644
--- a/tests/test_presets.py
+++ b/tests/test_presets.py
@@ -11513,6 +11513,24 @@ def test_resolve_content_rewrites_extension_base_subdir_paths(
 class TestCollectAllLayers:
     """Test PresetResolver.collect_all_layers() method."""
 
+    def test_non_utf8_legacy_command_keeps_replace_strategy(self, project_dir):
+        presets_dir = project_dir / ".specify" / "presets"
+        command_path = (
+            presets_dir / "legacy-pack" / "commands" / "speckit.legacy.md"
+        )
+        command_path.parent.mkdir(parents=True)
+        command_path.write_bytes(b"\xff\xfe")
+        PresetRegistry(presets_dir).add(
+            "legacy-pack", {"version": "1.0.0", "priority": 10}
+        )
+
+        layers = PresetResolver(project_dir).collect_all_layers(
+            "speckit.legacy", "command"
+        )
+
+        assert layers[0]["path"] == command_path
+        assert layers[0]["strategy"] == "replace"
+
     def test_single_core_layer(self, project_dir):
         """Test collecting layers with only core template."""
         resolver = PresetResolver(project_dir)