"DZ" isn't 'wrong', it's a perfectly valid two-character string consisting of "D" followed by "Z". Assigning to a multi-character string a encoded representation that isn't the concatenation of representations of each character in the string (especially while insisting that that makes it a distinct character in its own right) is what's wrong.

But the letter DZ is not the same thing as the letter D followed by the letter Z. It's a standalone letter in e.g. Hungarian or Slovak, much like æ isn't "ae".