I hope it makes sense, and I don’t mind testing with more domains, but seeing I already have lots of working domains without punycode, I reckon it has something to do with punycode
From the path shown I would think there is some issue when it checks if the domain is registered with Cloudflare or can be transferred. IMHO a glitch and I’d open a support ticket.
I have written to them about PunyCode problems several times, but they do not solve the problem. Just screw my domain manually and it works for a while. But it is necessary to add a new IDN domain and problems arise again.