More specifically, Unicode is one of those things (like bignum support) where Lua's design for embedding assumes that if it's a priority, your project will already have settled on a library for it, so anything Lua came bundled with would just get in the way. The GMP library, for example, is almost four times larger than the whole Lua runtime.

Besides, Lua strings are interned raw byte-arrays (like atoms in Erlang or Lisp atoms), and can have \0s and other arbitrary binary data. While the standard string library is ignorant of Unicode, there's nothing preventing extra libraries from providing Unicode-aware string operations.

Lua also left out native regular expression support, because it would be larger than the rest of the standard libraries put together. You can just load LPEG if it matters.