Hi Vivek
The configuration makes sure that the system only boots when the filesystem is properly configured and runs in an UTF-8 environment. In case you don't want this, you have to set this flag to false.
In your case you are starting tomcat in a way that the java environment is not set to UTF-8. This is not necessarily a problem, however if you want to support all kind of languages (e.g. non-ASCII and non-ISO-Latin characters, you really should run OpenOLAT with a UTF-8 file system. Setting the encoding can be tricky and depends on your operating system. Look up your operating system manual how to do this and which variable you have to set to correctly set the environment for the java virtual machine. It is not possible to set the encoding from within Java, you have to set it in your operating system environment.
Note that you can not change the encoding if you already have data. In that case all the filenames in olatdata need to be converted from the old to the new encoding. On Linux you could use the program iconv to do this.
Cheers
Florian