In case anyone is interested, here’s the solution I’ve come up with. Change line 44 in /app/Entities/Favorite/ClearFavoritesButton.php FROM:
if ( !$this->text ) $this->text = $this->settings_repo->clearFavoritesText();
TO:
if ( !$this->text ) $this->text = html_entity_decode($this->settings_repo->clearFavoritesText());
Notice the addition of html_entity_decode().