Small example to reproduce the bug:
Open your sidebar.php and add this:
<?php wp_list_categories('title_li=<h2>Pages&Categories</h2>'); ?>
or
<?php wp_list_categories('title_li=<h2>Pages & Categories</h2>'); ?>
or
<?php wp_list_categories('title_li=<h2>Pages & Categories</h2>'); ?>
As result "Categories</h2>" part will disappear.
origin of bug : "Categories</h2>" is considered by wp_parse_args as an unkown argument (because of the "&").