What is this "similar syntax"? Please point me to a specification document.
The syntax you cited above, did you make this up, or is this something some other program is already using? This doesn't look like a good solution, because this limits its use to URLs contained in M3U.

I don't think there is a specification, but I found

• https://siptv.eu/howto/playlist.html
• https://forum.kodi.tv/showthread.php?tid=317399

Each station can use a different character encoding for icy title. That's why I thought it was appropriate to assign charset to each station. Different regions use different character encodings for icy title.

Can you think of a better solution?

Do you prefer specifying icy title character encodings for playlist streams in database?

I don't know what that means, but we could (ab)use the fragment identifier to specify client-side parameters such as charsets (MPD being the client, telling MPD how to interpret the response).
Is there no existing standard for this? How do other players solve this problem?

It means saving something like this in database, sticker, or somewhere else.

[Radio.m3u/stream.1.url]
icy-title-charset=shift-jis

[Radio.m3u/stream.2.url]
icy-title-charset=shift-jis

I couldn't find any standard for this. pyradio solved this problem by having its own playlist format that specifies charset.

I think it's just better to start with a minimalistic dog house and upgrade to a proper standard later.
If you chose a minimal solution now, you could ditch it easily later.

Temporary scaffolding is fine as long as you don't make future upgrades difficult. We don't know when standards will emerge. It might take 2 decades.

Closing this because #charset=xxx solves this issue.