It's a very tiny patch, but one that probably should have happened before.  When org-pretty-entities is enabled, the entities are displayed as Unicode characters, which is nice, but if they are in the middle of a word, you need to terminate them with {}, which are also still visible.  So you have to write something like M\ouml{}bius, and when org-pretty-entities is on that is displayed as Mö{}bius, which really isn't what you want.  This patch special-cases "{}" following an entity, so they get hidden as well.  Hope it helps.

~mark