The GPE.INI file does not appear to be documented anywhere in the protocol specifications and seems to be due to legacy code. It appears that it used to be how the gPCUserExtensionNames and gPCMachineExtensionNames were maintained without the requirement for LDAP.
Other ini files are encoded as UTF-16, but this is a notable exception.
To create a GPE.INI file:
In User Configuration -> Preferences -> Windows Settings -> Shortcuts, create a new shortcut
Backport if required, the fix is in master.