Except by a third of all people who live in China and India. Not everyone speaks a language that is representable in the latin alphabet. In fact, a very large percentage of people do not.
And it is then worth noting that as it stands, the attitudes of western developers with respect to text input and name lookup has so horribly screwed the Chinese with respect to domain names that they started using numbers instead of letters for their major web properties.
I live in India. I have never seen a non-Latin alphabet domain, except when I opened <some hindi word>.<tld> and <poop emoji>.com just out of curiosity. Could you show me some non Latin alphabet domain names that are used?
I am not claiming that everyone speaks a language that is representable in the Latin alphabet.
China and India don't pose a problem since Pinyin uses standard ASCII characters and neither Chinese characters nor Brahmic scripts have any symbols that resemble ASCII characters.
For the same reason that my email client occasionally tells me "this may be a scam," even though sometimes it's not and I act accordingly. Based on whatever criteria it's using, the data received has a somewhat higher chance of being illegitimate.
We as (technical) humans can recognize (hence this discussion) that the use of this uncommon G is meant to mislead you into thinking you're going to Google, when in fact you're going to Hell. I'd like to be warned of that possibility.
In this case, the extremely oversimplified algorithm might be "does the domain, as filtered down to canonical characters, represent one of the top five destination domains, yet go somewhere else if not canonicalized?"
Chinese people will be fine since all Chinese URLs are either ASCII compliant or use Chinese characters, which can't be confused with any ASCII characters.
To my understanding the unicode standard encodes an ASCII transliteration of an Unicode symbol to itself, but what about typographical similances? Wouldn't that be a hard problem? Perhaps there are two unicode characters that look exactly the same (using a given typeface) but have different transliterations. Or vice versa - two totally different looking characters share transliterations and gave false alarms.
Non-latin alphabet domain names do have legitimate uses, although they are very rarely used.