It would make it hard to spot impostor domains like "news.усомbiнаtor[.]сом" if it was. There's enough inertia for FQDNs to be strictly ASCII and any UTF-8(outside ASCII) in domain names to be felt unnatural for an URL, so most systems default to the raw "Punycode" xn-- scheme for all IDNs.
It would make it hard to spot impostor domains like "news.усомbiнаtor[.]сом" if it was. There's enough inertia for FQDNs to be strictly ASCII and any UTF-8(outside ASCII) in domain names to be felt unnatural for an URL, so most systems default to the raw "Punycode" xn-- scheme for all IDNs.
In this case yes but it's meant as a punycode scam prevention where common Latin alphabet letters are swapped for similar looking alternatives.