I think restricting the allowed characters should apply to usernames and other unique identifiers that can lead to confusion (admin vs аdmin with a Cyrillic "а"). So if I write my name as "José", I should be able to make an account called "Jose" and still enter "José" in the name field, if such a field exists in the first place. Although I'm not even sure about this.

If you're saying that "José" should be accepted as an username, shouldn't "Борис" or "김" or "金" also be valid?

It makes sense to restrict the alphabet for things like usernames that should be unique, should be easy to read for security reasons and should be correctly handled by various types of backend software.

I'm not from the US and my name isn't ASCII, but I wouldn't mind spelling it with the English alphabet, even in a name field.

I also don't understand how English has 26 letters, but letters like "é" in "José" or "ï" in "naïve" appear as normal letters. And if I write "Jose" instead, it would read as offensive. In my language that uses Cyrillic, the letters of the alphabet are all the letters we use, period. It would just be wrong to borrow a letter from another alphabet, even if it's the same script, just because someone's name includes it in their language. I have a friend from a neighboring country that changed one of his Cyrillic letters when he came to my country. I would do the same if I went to his country and they didn't have a letter we have.