Bash dialog displays unknown text

It looks like dialog is using box-drawing characters which your terminal emulator doesn't understand properly (among other issues).

For a quick work-around, you can tell dialog to use - and + to draw boxes, or to not try to draw them at all:

dialog --ascii-lines --title "Hello" --msgbox 'Hello world!' 6 20
dialog --no-lines    --title "Hello" --msgbox 'Hello world!' 6 20