How to fix: slashes urlencoded as %2F giving 404 in Apache

I ran into a problem today where URLs that contained "%2F" in them were giving 404s in Apache. By enabling mod_rewrite logging it became evident that Apache was short circuiting the request even before entering the module.

After some googling I came upon the AllowEncodedSlashes directive. I have no idea why this is off by default, but it fixes the problem.