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It’s about domain names. Literally.

That’s an unusual interpretation….

Maybe it would help to read the rules from the source.

https://www.nic.io/rules.htm

For comparison, there’s the mail policy.

In the event that any .IO domain is used either directly or indirectly for the purpose of directing unsolicited electronic mail{…}

The meaning of “used, directly or indirectly” is not about what letters are in the domain name.