I think this is specific to w32. Yes & needs to be escaped there.
I hope you mean that Emacs or Emacs W32 should do the escaping. These
binding indications are added automatically.
I am not sure I understand you, but & is the character you put before a
character in the menu string on w32 to mark that character as an
accelerator in menu. (It will be shown underlined then.)
An example: "&Help" will show "Help" in the menu with "H" underlined.
So fixing this is a w32 specific problem.
We discussed a little bit before adding the possibility to use
accelerators in the menus. Perhaps this should be fixed when that is
done to avoid splitting the code to much?
The key-binding indication, e.g. "(`C-x C-f')" or "(`M-&')", is added
automatically by Emacs. This is not text that I added as a user (e.g. using
:keys). So the problem needs to be fixed at the program level (Emacs W32 or
Emacs), not at the user level. That's all I am saying.