Remember there is also Troubleshooting section on docs.my-aac.org website: https://docs.my-aac.org/troubleshooting
Open the file data/monster/monsters.xml and replace in the first line the encoding with:
encoding="UTF-8"
Note: the spaces in encoding has been removed. Now it should load properly the file.
Note2: You still need items.xml file to copy from other distro and paste into data/items, otherwise it won’t load the monsters.