Of course they work properly once you paste them into a browser. But then you've visited the URL.
One alleged justification for slugs is that they allow people to guess what the URL is about without actually visiting it. This usually happens in forums, comments, text messages, and other places where people can only use plain text. But non-ASCII slugs look undecipherable in exactly such places.
I haven't noticed this ever being an issue.
At least in Firefox, non-ASCII characters will show as-is in the URL bar, but in the copied URL they will be properly encoded.