The source of confusion might be that the documentation changed with Java version 7.
In Java 6 the documentation for solaris and unix ( http://docs.oracle.com/javase/6/docs/technotes/tools/solaris/native2ascii.html ) says: "The Java compiler and other Java tools can only process files which contain Latin-1 and/or Unicode-encoded (\udddd notation) characters. native2ascii converts files which contain other character encodings into files containing Latin-1 and/or Unicode-encoded charaters."
I think it clearly means that the output is Latin-1, and characters not in Latin-1 will be Unicode-encoded in the output.
I checked Openjdk 6 on Ubuntu and the native2ascii there does not conform to the documentation, it outputs Latin-1 characters as Unicode-encoded. So either the documentation or the native2ascii tool can be considered incorrect in that case.
However in Java 7 and Java 8 the documentation ( http://docs.oracle.com/javase/7/docs/technotes/tools/solaris/native2ascii.html https://docs.oracle.com/javase/8/docs/technotes/tools/unix/native2ascii.html ) says: "native2ascii converts files that are encoded to any character encoding that is supported by the Java runtime environment to files encoded in ASCII, using Unicode escapes ("\uxxxx" notation) for all characters that are not part of the ASCII character set."
I checked Openjdk 8 native2ascii on Ubuntu and found that it works accordingly, it converts Latin-1 characters to Unicode-encoded.
Note that the 7/8 documentation mentions also "This process is required for properties files containing characters not in ISO-8859-1 character sets."
I think it clearly means that properties files containing Latin-1 (aka ISO-8859-1) encoded characters are still valid.