Sorry to nitpick, but you underestimated: "many cases" is really "all cases", no exception, because under GDPR you have right to correct your data (this is about legal name, so obviously covered). So if user requests under GDPR art. 16 that his/her name is to be represented in a way that matches ID card or whatever legal document, then you either do it, or you pay a fine and then you do it.

That a particular technical solution is incapable of storing it in the preferred way is not an excuse. EBCDIC is incompatible with GDPR: https://news.ycombinator.com/item?id=28986735