Not true, the new gTLD program allows Internationalised Domain Names (IDNs), e.g. the Japanese .みんな (minna, "everyone"). The ASCII label is not the same as the TLD itself.

I understand the TLD is not the label, but since punycode encoded TLDs use '-', aren't they excluded by the a-z rule?

I was thinking the same thing, and concluded that perhaps the label is not the actual ASCII domain name. So perhaps みんな's label is "minna".