That makes sense with regards to the high-bit.

I tried setting the ssc to 7 bit and the printer to 7 bit but it didn't seem to work properly, inserting spurious 7f characters.

PR#1, PRINT "TESTING 7 BIT" and it comes out mangled. Looks like 8 bit is the way to go.

Code
hexdump -C test7bit5.bin  
00000000  0d 29 5d 7f 50 52 7f 49  7f 4e 54 7f 20 7f 22 54  |.)].PR.I.NT. ."T|
00000010  7f 45 7f 53 54 7f 49 7f  4e 47 20 7f 37 7f 20 7f  |.E.ST.I.NG .7. .|
00000020  42 49 7f 54 7f 22 0d 29  54 15 4d 54 25 39 47 20  |BI.T.".)T.MT%9G |
00000030  5d 05 25 49 51 7f 0d 29  0d 29 5d 7f 50 52 7f 23  |].%IQ..).)].PR.#|
00000040  7f 30                                             |.0|
00000042