Description:
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Quote from http://en.wikipedia.org/wiki/Unicode_equivalence:

"...the code point U+006E (the Latin lowercase 'n') followed by U+0303 (the combining tilde '◌̃') is defined by Unicode to be canonically equivalent to the single code point U+00F1 (the lowercase letter 'ñ' of the Spanish alphabet). Therefore, those sequences should be displayed in the same manner, should be treated in the same way by applications such as alphabetizing names or searching, and may be substituted for each other."

It might be this is more a case of just documenting that the unicode functions don't support unicode equivalence (for completeness).

Test script:
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echo "Output recorded from a terminal interpreting UTF-8\n\n";

var_dump("\x6e\xcc\x83");
var_dump(utf8_encode("\xf1"));

var_dump(utf8_decode("\x6e\xcc\x83") == "\xf1");
var_dump(mb_convert_encoding("\x6e\xcc\x83", "ISO-8859-1", "UTF-8") == "\xf1");


Expected result:
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Output recorded from a terminal interpreting UTF-8

string(3) "ñ"
string(2) "ñ"
bool(true)
bool(true)

Actual result:
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Output recorded from a terminal interpreting UTF-8

string(3) "ñ"
string(2) "ñ"
bool(false)
bool(false)