I didn't change locale manually, only with corresponding applet in settings. And it's “ru_RU”, not “ru_RU.UTF-8”.
I executed shell with custom $LANG variable only for unicode support testing.
I think that disabling CONFIG_FEATURE_CHECK_UNICODE_IN_ENV is safe.

Ctrl+Space is default key combination in xterm to input NUL character.
Normally, the shell should ignore this character.
I tried to find corresponding option, but found only EXTRA_COMPAT.
I'm not sure that busybox with this option enabled will handle NUL character issue.