It looks like a problem with your webserver setup.
If you use Foobar- instead of Thread-, i.e. something that does not even exist and should not invoke the forum or Google SEO's rewrite rules at all, it also gives the same HTTP 400 Bad request error. That's your webserver somehow not able to handle these characters.
Google SEO itself supports these characters, I originally made this plugin for a Japanese learner's forum and URLs with 漢字 work fine. The board should be using UTF-8 but that's the case for any recentlyish install anyhow.
Thank you for your quick reply. I found out my webhost doesn't allow chinese character in the URL. Is there anyway to have the Google SEO URL drop the chinese character if detected and have it rewritten without them? Would you know the reason why some webhosts don't allow chinese characters in the url? I don't think theres any security threat in allowing chinese characters in the URL besides higher CPU cost.
How about asking your webhost to fix this issue, or make an exception for your site, or (if they can't do that) switch to a host that works for you?
Google SEO can drop characters from the URL, sure. It does that by default for punctuation characters but it works for other characters just as well. It's ugly, though, since in order to get rid of all Chinese characters you would have to set it to something like this:
!"#$%&'( )*+,-./:;<=>?@[\]^_`{|}~一丁七万丈三上下不与丐丑且丕世丗丘丙丞両並个中丱串丶丸丹主丼丿乂乃久之乍乎乏乕乖乗乘乙九乞也乢乱乳乾亀亂亅了予争亊事二于云互五井亘亙些亜亞亟亠亡亢交亥亦亨享京亭亮亰亳亶人什仁仂仄仆仇今介仍从仏仔仕他仗付仙仞仟代令以仭仮仰仲件价任企伉伊伍伎伏伐休会伜伝伯估伴伶伸伺似伽佃但佇位低住佐佑体何佗余佚佛作佝佞佩佯佰佳併佶佻佼使侃來侈例侍侏侑侖侘供依侠 [...and thousands more, you get the idea...]
Obviously the punctuation feature was never meant for this...
For a more direct solution you'd have to change code, e.g. inc/plugins/google_seo/url.php :: google_seo_url_separate($str), and add a filter there that removes an entire character range.
Still it would be better to just fix your webserver.
Now to stray away from all this, what reasons would ipage.com have to only allow english characters?
I can't think of any besides a little higher cpu cost.