Additional notes (January, 2023):

Forwarded to SG12 with paper issue 1409, by decision of the CWG and SG12 chairs.

(From National Body comment US 142 on the C++20 DIS.)

Subclause 15.6.3 [cpp.stringize] paragraph 2 specifies:

If the replacement that results is not a valid character string literal, the behavior is undefined.

Undefined behavior during lexing is not acceptable. This ought to be ill-formed.