See https://github.com/gohugoio/hugo/issues/5687
Prior to Hugo 0.54 this was working fine without any issues, so it appears to be a bug from 0.54 onwards.
To reproduce the apparent bug, add tags = ["Özgür"]
to some content.
Then add the official taxonomy template code to a page template:
{{ $taxo := "tags" }} <!-- Use the plural form here -->
<ul id="{{ $taxo }}">
{{ range .Param $taxo }}
{{ $name := . }}
{{ with $.Site.GetPage (printf "/%s/%s" $taxo ($name | urlize)) }}
<li><a href="{{ .Permalink }}">{{ $name }}</a></li>
{{ end }}
{{ end }}
</ul>
Hugo 0.54+ fails to generate the correct permalink for non-ASCII taxonomy terms in the above code.