url() -> drupal_urlencode() encodes files with spaces incorrectly

When calling url() with a path such as

"path/to/file & name.jpg"

it will incorrectly encode it as:

"http://servername.com/path/to/file+%2526+name.jpg"

This is due to the use of urlencode inside of rawurlencode() in drupal_urlencode() function.

Expected Output: Filename encoding follows RFC1738
Actual Output: Filename encoded by urlencode()