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An index is not being utilized by MySQL when there is an escaped character in the query because the escaped character prevents the database engine from performing a direct search using the index. When a query contains an escaped character, the database engine must scan the entire table or index to find the matching rows. This scan can be slower and less efficient than using an index. Therefore, it is recommended to avoid using escape characters in queries whenever possible, or to use them with caution and only when necessary.