Very interesting question.

I knew the behaviour with the windows collation (no sql_ prefix to the collation name) because that's the collation I've worked with more than any other (in fact it's the only collation I've worked with since varchar(max) existed). I didn't know the behaviour with the other collation, but there was only one option with "hang" in it so I picked that one.

So now I've learned something - the other collation works better for this weird case.