begin{CJK}{UTF8}{gkai}木protectend{CJK}

! Argument of reserved@a has an extra }.
! Paragraph ended before reserved@a was complete.

documentclass[12pt, a4paper]{extreport}
usepackage[utf8]{inputenc}
usepackage[T1]{fontenc}
usepackage{lmodern}
usepackage[colorinlistoftodos, textwidth=marginparwidth]{todonotes}
usepackage{CJKutf8}

begin{document}
listoftodos
todo{protectbegin{CJK}{UTF8}{gkai}木protectend{CJK}}

end{document}

! Package inputenc Error: Unicode char u 8:木 not set up for use with LaTeX.

contentsline {todo}{color@box {}{orange}{leavevmode {color {orange}o}}
begin {CJK}{UTF8}{gkai}GenericError {(inputenc) }{
 Package inputenc Error: Unicode char u 8:木 not set up for use with LaTeX}{
 See the inputenc package documentation for explanation.}{
 Your command was ignored.
 MessageBreak Type I <command> <return> to replace it with another command,
 MessageBreak or <return> to continue without it.}
 end {CJK}}{1}

! Paragraph ended before @dottedtocline was complete.

tex capacity exceeded