Index: subversion/libsvn_wc/props.c
===================================================================
--- subversion/libsvn_wc/props.c        (revision 15987)
+++ subversion/libsvn_wc/props.c        (working copy)
@@ -2060,7 +2060,8 @@
         }
 
       item->target_dir = svn_path_canonicalize
-        (svn_path_internal_style (item->target_dir, pool), pool);
+        (svn_path_internal_style (
+          svn_path_uri_decode(item->target_dir, pool), pool), pool);
       {
         if (item->target_dir[0] == '\0' || item->target_dir[0] == '/'
             || svn_path_is_backpath_present (item->target_dir))