Many commentors are positing the "clever" sort is what 99% of the user's want, but I really doubt it has been properly checked beyond the original PO's hunch and at most some user panel with pre-sampled data.
Most of these decisions are early default behaviors that stay there as long as users aren't clamoring for change, and TBH I can't imagine most users to have a self emerging strong opinion on how alphabetical sort should be working.
This case is really the opposite, though. Sorting strictly by character value was the default for decades because it was the quickest and easiest to implement. Only with computers hitting the really big mainstream, and millions of complaints from users who don't know the ASCII table by heart, or have ever heard of ASCII, did tools start to implement the kind of ordering logic that any user who isn't a developer would expect.
Most of these decisions are early default behaviors that stay there as long as users aren't clamoring for change, and TBH I can't imagine most users to have a self emerging strong opinion on how alphabetical sort should be working.