HN automatically converts these urls to punycode, maybe this is a bug and it automatically converts everything to punycode even though it doesn't make sense?
I already mentioned that, and it's not what they mean. Hover your mouse over a https://xn--971h.com link in a comment on HN and notice that it's pointing to https://x.com. This does seem to be an HN thing; see here: https://jsfiddle.net/rtfhejdy/
I think so. Then I'm not right about the punycode encoding of 饾晱.com - it's that it isn't even needed. I've emailed dang about it.