alt Hacker NewsIt creates a parser differential; two different components of the system can treat the same string as different hostnames. Things that have trusted hostnames, or privileged/admin hostnames that are screened out, or SSRF filters all depend on accurately comparing presented hostnames.
This is pretty situational, though, isn't it? You still have to be dealing with IDN names.
It is situational, but it very much seems like a thing you'd squirrel away and bring out when you find a system where the differential is helpful.
DNS names are a thing where Sales is going to tell the Engineer that they can't issue the customers randomized ASCII names like abxuewrf.my-thing.example because real customers want to write our-brand-name.my-thing.example instead - even though you already know bad guys will choose billing.my-thing.example and name-of-bank.my-thing.example and every other unintended bad choice even before we realise about likelihood of these confusion bugs in software like Python.