Thanks for your response, Sue. I am using OLEDB Native Client.
Usually, I use OLEDB native 11 by default for any development work. That's how I found this difference. Dev connection string (in SSIS config table) had explicit Provider=v10.1. Rest of the environments didn't have any provider mentioned. So, I assume SSIS chose to use the one from SSDT designer (which I use as v11.1 by default).
Apparently, Microsoft has changed how character conversions are done with new version of Native Client OLEDB.
I'm guessing there could end up being some push from MS to get people to move to an updated driver. They reccently "undeprecated" the OLE DB driver for SQL Server and announced a new version will be released early 2018. It will support SQL Server 2012 - 2017.
Announcing the new release of OLE DB Driver for SQL Server
Sue