glFusion is already UTF-8 out of the box - the default install is UTF-8 - but the user has the option to de-select it if they need to.  What I think you are not understandnig is that the line in stieconfig.php.dist is meaningless - iso-8859-1 is simply a placeholder that is overwritten during install.  There is no value in changing it.  But, if you do change it there - you have to update the install program to now look for the new string to do the replacement.  When it is all said and done, changing the .dist file does nothing to make a site utf-8 or not.