For String encoding, you can find the info on the wiki of the ShumiTranslator tool done by HobbitDur which detail the following file (link is kept here to the old wiki for archive purpose):

String Encoding

FF8 strings are converted to byte arrays.Char Table Some of which aligns to the grid of text in the texture if you -32 from the value. Some values are 1 byte = 2 characters, most are 1 byte = 1 character. There are also special bytes that use up 1-3 bytes.

Special Bytes

These bytes are points where things are inserted or a change in formatting. Some just say to ignore this string unless the player unlocked something.

Starting Byte	Size	Name	Description
0x00	1	NULL	End of string
0x02	1	\n	Inserts new line Some areas ignore this character.
0x03	2	Name	When see 0x03??, in a string, it's usually a characters name.
0x05	2	Icon	0x05?? used to draw a symbol from icons.tex, like controller buttons. On PC it draws the letter of keyboard keys assigned to the controls.
0x06	2	Color	0x06?? used to show a change in formatting like color
0x0A	2	Special_Value	0x0A?? can be a string or number value. Depending on which string you are reading it can be a different value.
0x0B	2 or 3	Cursor_Locations	Might be number of possible return values that determine whether this is 3 or 2 bytes. Like YES or NO questions will only be 2 bytes but screens with a list of multiple selections will will use 3 bytes.
0x0C	2	SpellID	Used to place a name of a spell.