Hi JQL and thanks for bringing this to our attention. I have captured this and have it on our list to fixes.
The problem is as you had touched on, with a formatted character within the text. This is causing the issue when the font is moved from paperspace to modelspace as well as the reason they are not able the change any part of the style. This effects texts boxes only MText and Labels in this case but not Dimensions.
I have provided a workaround and have outlined it below. Though not ideal, you may pass this onto your consultants for the time being.
Work Around:
1)Open the exported LayOut file in AutoCad or equivalent.
2)Type Style and set the desired Style
3)Create a sample text string somewhere in the paperspace using the set style. (This can be Mtext or standard Text)
4)Explode all inputted LayOut text and Labels (not dimensions)
5)Type MA (match properties) and use the sample text string you had created then select all the LayOut text and Labels.
6)If you have multiple lines of text that you want to convert to MText, use the txt2mtext command and select the desired text accordingly.
Now changing space and setting a global style will work within your dwg file.
Sorry for the inconvenience.
Trent