Licat posted this in one of our Discord Channels, which may serve as an explanation of why this has not been implemented yet. It does not mean this feature is dead in the water, but it is not a simple thing to add.
@Licat
I believe we’ve given an attempt to properly handle diacritic ignoring search but because of unicode complexities (sometimes the accents are separate characters, sometimes they are not), the search result highlighting would get improper character offsets (meaning it would highlight the wrong part of the sentence).To properly handle it required a lot of compute power which means search would have been significantly slower.
And on top of that, it also completely breaks searching for a couple of languages like hebrew and we had no idea how to fix that, so eventually the initiative was put to the background.