I don’t think we’ve ever compiled a full list of the characters that cause problems. In general, you want to stay with a latin alphabet. So for example, don’t use characters with umlauts or other chars. I don’t think that would be an issue for you, but for example, on windows, many of our users with special characters in their username have problems due to how the MySQL process starts:
In the case of the issue you encountered, you mentioned being surprised that certain characters broke things even though you’ve seen them used in other instances of WP passwords.
You’re right that this is the case. If you wanted to, you could use the original password that caused issues by updating the password through the WP admin or through the “Forgot Password” workflow. This is because those form fields are more directly processed by PHP.
The reason that Local couldn’t use the password you used is because something within the password broke the cli command that Local used when creating the site (that gnarly error message is the actual wpcli command that Local runs to create the WP site).
I can’t see the full password in the screenshot, but basically, strings that have special meaning in the shell might cause issues. It’s challenging because I think there are differences between Windows shells and Mac/Linux.
Anyway, I know that’s not an official list of characters to avoid, but hopefully that gives a little background. As a rule of thumb, when creating a new site in Local, I’d stick with alphanumeric. If you really need to bring in special characters, update the PW within the WP admin.