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sqlite3_bind_text16 & weird AI
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It is unclear why you, as a SQLite user, are concerned with what a private function does.

As for your expectation, it would be better matched to the BLOB type. That is what will ensure that what you put in is exactly what you can later get out.

Once a (SQLite) is database created, its text encoding scheme is fixed. We should consider it a convenience that it is possible to present, for storage in the database's encoding, text with different encodings.  The private function you found is part of a collection that allows that service, along with other coding changes that become necessary.