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This is/was not a bug. The sample code had two fundamental issues:

1. as the buffer was not flushed before that line, the string returned by ob_get_contents() ('roast is a good boy') was passed to the output handler (md5) twice as the buffer was flushed at the end of the script

2. md5 expects two parameters to which OB passed the buffer contents and an int representing the OB context op. This int was interpreted by md5 as a bool true and hence the binary return value

The following code achieves what OP wanted:

<?php
function md5Proxy($buffer, $phase) {
    return md5($buffer);
};

ob_start('md5Proxy');
echo 'roast is a good boy';
ob_end_flush();
?>

Result:
-------
e21b1aad689c47aeac5b7867c2c77afa