The AppleScript for the Obsidian New Item script is somewhat above my pay grade, but I think there’s a double encoding of the title going on.
When I comment out the encoding on line 88 it seems to fix the issue:
if prefUrl is "obsidian-advanced-URI" then
set urlKey to "advanceduri"
-- An invalid value for com.cogsciapps.hook integration.obsidian.URL.scheme has been set. There, we present the following options and set the default here.
-- set encodedTitle to theString's stringByAddingPercentEncodingWithAllowedCharacters:charset
set callbackURL to callbackURL & "?src=" & encodedSrc & "&urlKey=advanceduri&plusencoded=yes"