I lost count of the projects where this was an issue. US and Western European-born devs are oblivious to this problem and it ends up catching them over and over again.

Yeah, it's amazing. My language has a Latin-based alphabet but can't be represented with ISO 8859-1 (aka the Latin-1 charset) so I used to take it for granted that most software will not support inputs in the language... 25 years ago. But Windows XP shipped with a good selection of input methods and used UTF-16, dramatically improving things, so it's amazing to still see new software created where this is somehow a problem.

Except that now there's no good excuse. Things like the name in the linked article would just work out of the box if it weren't for developers actually taking the time to break them by implementing unnecessary and incorrect validation.

I can think of very few situations, where validation of names is actually warranted. One that comes to mind is when you need people's ICAO 9303 compliant names, such as on passports or airline systems. If you need to make sure you're getting the name the person has in their passport's MRZ, then yes, rejecting non-ASCII characters is correct, but most systems don't need to do that.