That’s not a gTLD, it’s a ccTLD.

See https://news.ycombinator.com/item?id=24442033 for why it’s allowed on ccTLDs

That only works in Chrome for me so I assume it became sentient somewhere deep in the googleplex and is trying to escape.

Doesn't seem to work in Edge.

Works in Waterfox for me as well.

Clearly, it is succeeding.

I guess the problem with this is interoperability issues with LAN hostnames.

ccTLDs are so old that no actual rules were codified. As such they can do all sort of stuff. Like bare domain names for things like email.