It's impossible to convert a table to some character set, but at the same time set the DEFAULT character set to another character set:
The problem happens because the code handling both clauses uses HA_CREATE_INFO::default_table_charset to check conflicting declarations.
ignored the utf8 part and just use the latin1 part for both conversion and DEFAULT.
It should be fixed to allow any combinations of cs1/cl1 and cs2/cs2 in:
- [DEFAULT] CHARACTER SET cs1 [COLLATE cl1], and
- CONVERT TO CHARACTER SET cs2 [COLLATE cs2]