The machine-readable part of the German passport uses this DIN standard, so to avoid having to explain German orthography to some suspicious border guard, you'd better make sure you use it.
But when you get a US visa, the name in both the visual and machine redeable part is written with รค replaced by a, so you end up with three different spellings in your passport. And then you get a Russian visa, where they use a pretty strange transliteration into the Cyrillic alphabet (not the one I would use) and then transform that back to ASCII in the machine readable zone for variant 5. And so on.