Hi, you are totally right! Short explanation:
Punycode is a representation of Unicode with the limited ASCII character subset used for Internet host names. Wiki:
https://en.wikipedia.org/wiki/Punycodewww.⧫.to will be converted into the punycode address:
www.xn--7wi.toxn--7wi is the Punycode of ⧫
You can Check this here:
Punycode converter:
https://www.punycoder.com/------------------------
This is the same like if you click on a Emoji Domain - An emoji domain is a domain name with emoji in it, for example www.😉.tld.
Wiki:
https://en.wikipedia.org/wiki/Emoji_domain