https://news.ycombinator.com/formatdoc is the only actual description, but it does seem that non-ascii text is ignored, yes.

The rules are mainly there to filter out emoji; it can do most non-ASCII outside of that. L͇̭̝̲͍̠̼͒̌̋̄͟͝ͅi̢̭̬̥͍̣͓͗͆͆̄͝k̸̙̹̠̘̤̪͓̼̠̋̽̿̇̕͜͝͠ė̜͙̥̟͍͇͉͖͌́̑̈́̎͐ Ž̶̨̛͇͙̹͖̳̂͊͐̅̇̓a̸̭͙͇͙͙̝̟̯̮̠͌̊̑̏͊͡ĺ̸̻̟̩̼̙͈̒̿̀̈̓̌́̐̓ģ̵͉̺̹̥̤͎̟̓̓̑̋̈́̇͢͜͡ơ̷͖̤͎̮͈͆̌̿͂̂̚͘.̴̱̬̮̟͖͆̄̉̔̏͛̒̇̌ͅ

Why would they filter emoji specifically? They're such a major part of modern communication

I don't know what "modern communication" you're using, but the only emoji I use are ones that can be written in simple ascii, :( , :-/ , :) , :D , ;) , etc. Most emoji are simply symbols for different activities, but they don't need to be used at all. The only place I see heavy use of emoji is on twitter, but that's because of the character limitation. Additionally emoji are colored and not black and white like text so they're glaring with respect to text around them.

My guess is that they draw undue attention to themselves.