During domain registration in CCPv2 the IDN domain is shown as available for purchase, however in fact it is already registered.
Custom WHOIS checker is set up for TLD.
If the Checker is not the same as the Registrar, the IDN > punycode transformation is not performed, so incorrect response may be received from WHOIS.
The issue is acknowledged as POA-113633.
Set up the registrar as WHOIS checker for TLD in OA > Services > Domain Registrars > TLDes > $required TLD > Checker.