If you start guessing the encoding, at best it won't work in some cases, at worst you are introducing security vulnerabilities. You can try, but there is just no way to do it right.
http://michaelthelin.se/security/2014/06/08/web-security-cro...
There are lots of pleasing aspects to this choice. It's ASCII compatible of course, so anything that was actually ASCII is still ASCII, anything that was almost ASCII is just ASCII with U+FFFD where it deviated.
The replacement character resolutely isn't any of the specific things, nor any of the generic classes of thing you might be expected to treat differently for security reasons. It isn't a number, or a letter (of either "case"), it isn't white space, and it certainly isn't any of the separators, escapes or quote markers like ? or \ or + or . or _ or...
... yet it is still inside the BMP so it won't trigger weird (perhaps less well tested) behaviour for other planes.
It's self-synchronising. If something goes wrong somehow, in a few bytes if there is UTF-8 or an ASCII-compatible encoding the decoder will synchronise properly, you never end up "out of phase" as can happen for some encodings.
Most usefully, whatever you're now butted up against works with UTF-8 now. Maybe some day that'll get formally documented, maybe it won't. As the years drag on the chance of specifying _anything else_ shrink more, and the de facto popularity of UTF-8 means even if it's never formalised anywhere everybody will just assume UTF-8 anyway and you haven't to lift a finger.
Smashing the bits that don't mean anything to U+FFFD leaves humans with the unmistakable evidence that something was lost here. It's not like U+FFFD doesn't scream "Hey stuff went wrong here" - it's an inverse question mark on a diamond, short of an animated GIF that says "Uh-oh" with an anvil dropping onto a cartoon character's head we can't do much more.
If you're sure it's supposed to be ISO-8859-1 then sure, treating it was UTF-8 eats data, likewise if it was supposed to be KOI-8 or something. But you don't know, so, if "Give up and demand a human fix things" isn't a sensible option, which it often won't be, this is the best we can do.
Yes. The fact that you couldn't interpret it doesn't mean that the consumer of your output couldn't have if you'd passed it through without going out of your way to destroy it.
There is a large, enormous class of software that cares detects specific sequences meaningful to it that exist in ASCII, and copies other parts of it input directly into its output without really caring to modify it. If you don't intentionally destroy your input, this will silently Just Work with many encodings in actual use.
Just tell the text processing tool the encoding. Or, don't use text.
If you resent having to pick an encoding, it still works - just the encoding is UTF-8 because duh, of course it is.
In practice, if this comes up at all it's a huge mistake to be destroying your data. Curse the person who wrote the tool in the middle that eats data, and don't be them.
Even outright throwing errors is better than replacing characters and expecting whoever looks at the data on the other end to notice.
Notice that, again if you want an error you can detect U+FFFD and error out on that. I mean apparently this isn't Unicode after all right? So the only way U+FFFD got into the pipeline is because of an error you've now decided you should have caught but... didn't?
Your approach randomly introduces unspecified behaviour which is likely to introduce security vulnerabilities and who knows what other problems because it resists "Full Recognition Before Processing".
Unlike treating text in unknown encoding as UTF-8, passing it through mangled by tools that didn't actually understand it as you've proposed does lead to real world vulnerabilities that can be as serious as remote code execution.
When I worked with library records, I had to deal with text encodings that pre-dated SQL, though I suppose I should be thankful that ASCII existed by then so they were mostly ASCII compatible, but even today there are systems designed to output MARC-8 + UTF-8 as a fallback only when a MARC-8 character isn't available (MARC-21) instead of just using UTF-8.
I'll admit though, outside of MARC-8 and the various Unicode encodings, I'm having trouble thinking up systems that would still be incompatible today. Old documents, yes, absolutely would be encoded in different charsets, Windows still generally defaults to encoding in their Latin1 if I recall correctly, but most systems today do expect UTF-8 over the network at least, and UTF-16 for display perhaps...
Don't get me started on line endings though, and how many files use one, both, more than one ... and especially how much fun it can be with git repos cross-platform, or when automated tools use platform default line endings when they should be configurable, etc. CSV files that aren't properly escaped are also a special mini hell...
Data is never easy. :) And that's assuming it's written correctly - https://rachelbythebay.com/w/2020/08/11/files/
What I am pointing out is that "know" is just doing a lot of magical work in that sentence.