This is not a typographic decision, it is a spelling decision,
and not up to the font designer, I'd say. It is a typographic
decision whether the diaeresis "digs into" the glyph below, or if
an e-above looks like a capital e inside. But spelling changes,
whether transient or permanent, should be the "author's" call.
No, it is not a spelling decision. Both are umlauts: one with a letter
form of /e/ and one with a letter form of ยจ . Any textual editor in
the world would make that judgment call, and typeset according to the
graphic expectations of his (or her) readers, not according to the
graphic usage of the author, no matter how conservative the text.
