Why wouldn't it make sense? If a chinese user e.g. specifies that they speak chinese and, say, french, all characters in those two language would show up as uni

Why wouldn't it make sense? If a chinese user e.g. specifies that they speak chinese and, say, french, all characters in those two language would show up as unicode and everything else as punycode. A malicious domain using e.g. cyrillic characters to create a domain that looks just like another french (or just plain-ASCII) one would show up as punycode. Sounds like a net improvement over what we have now.