Try the following:
function masked_utf16_to_utf8($str) {
$str = preg_replace_callback('/\\\\([0-9A-Fa-f]{2})([0-9A-Fa-f]{2})/', create_function('$match', 'return mb_convert_encoding(chr(hexdec("$match[1]")).chr(hexdec("$match[2]")), "UTF-8", "UTF-16");');
return $str;
}
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