You can add the following hook to your functions.php file:
function chris_decode_entities( $email_subject, $type, $post_id )
$email_subject = html_entity_decode( $email_subject );
add_filter('bbpnns_filter_email_subject_in_build', 'chris_decode_entities', 10, 3 );
That will handle all HTML entities. Make sure you have UTF-8 for subject enabled in case some entities turn out to be UTF-8 wide characters.