Insert accented letters in passwords
Entering a password with a diacritic works as expected. You have to use the proper keys though:

To enter an umlaut you have to use altU
To enter an accent grave you have to use alt`
To enter an accent acute you have to use altE
To enter an accent circumflex you have to use altI
To enter a tilde you have to use altN  

The above are all dead keys and have to be followed by a second key. If you enter space the diacritic itself is the "entered sign". Entering a dead key in a password field you neither get the typical yellow/orange dead key indicator nor a bullet - you get a beep only!

The back tick itself is no accent (dead key) but simply a back tick.

E.g. to enter an ü using an US English input source and an Apple keyboard with a (physical) US English layout you first have to hit altU and then U again.

In my virtual machine I get an alert sound but no bullet after entering the first key combination (the dead key ¨) and then after entering the second (single) U a new bullet. The resulting letter is the (lower caps) ü.



BTW the ¨ is no accent. Like accents it's a diacritic though.