I suspected this to be the case but wasn't completely sure. Thank you for confirming.
Perhaps I don't understand how this function is typically used in practice, but to me it seems using Registration.ToASCII() alone is never sufficient for registerable domain name validation. In addition to it, one should always check if the input was not an IPv4 address to be thorough. Or is it expected that typical users of this function will further validate the domain name against a whitelist of TLDs, hence making the IPv4 check unnecessary?