It could also be a cost benefit analysis. How much business lost vs. the cost of supporting. Especially when many such users have encountered the problem often enough to already have a work around.
There are definitely some cases where it is a testing issue, but especially with accepting all possible valid names, sometimes the cost is too high to convince the one in control of funding.
It's just really annoying when it's a government system and it's use is required.
This is slightly off topic, but I recently came across a lawsuit involving German passport and their having a person's name printed IN ALL CAPS. The plaintiff was suing for his right to use lower case characters as that was how his name was spelled correctly vis-a-vis how other families who use the same letters in the same order but with different casing spelt it.
falsehoods government bureaucrats believe about names...
Relatedly, the OCR machine-readable part of a standard (ICAO) passport can't contain accented letters, so ICAO has a standard for how to systematically transliterate various scripts into Basic Latin.
There are definitely some cases where it is a testing issue, but especially with accepting all possible valid names, sometimes the cost is too high to convince the one in control of funding.