Unicode, Latin1, or others. Again, a case for standardization. In the current algorithm, the Unicode representation is used. Digest URIs are not meant to provide a general solution for specifying or computing the equivalence of resources. A digest is not guaranteed to be unique.
Legal issues are out of scope.
I disagree with that. Some versions will be chronological. There is many ways to handle new versions. Digest-based model URIs provide a way to refer to the RDF content directly, rather than to the location of its serialization. This is exactly the intention.