When you use an anvil to repair an item that has been named using a formatting tag (§a in the case of the screenshot) it drops the '§' symbol from the name.
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Duplicate of MC-3238, please use the search function to see if your bug has already been submitted. Currently over 40% of tickets are being closed as duplicate.
That character causes problems so Mojang has purposely not allowed it. The same goes for chat.