What's interesting is that the transliteration of symbols is not even remotely uniform in icao 9303. There are multiple recommended transliterations of some characters, and it definitely goes only in one direction: national script -> MRZ transliteration. It is not possible to go the other direction.
It's not intended to round-trip, it's intended to be roughly human-readable without knowledge of the original script. It's pretty close to the system Olympics used, with the Wikipedia example of Hämäläinen -> HAEMAELAEINEN being well known as a gold medalist cross-country skiier.
Newer versions of the transliteration encourage stripping diacretics, so that would be HAMALAINEN. Much more readable to native speakers, but obviously loses information.
I wouldn't recommend it as there are official tranformations from the countries which uses diacretics and they most times are not to strip them. It's kinda another case of people forcing stuff onto other cultures. And if you do bussiness in some of the countries in some industries you might even get into legal trouble if you apply that.
Take it up with the spec, then. That is the recommendation:
> Section 6 of the 9303 part 3 document specifies transliteration of letters outside the A–Z range. It recommends that diacritical marks on Latin letters A-Z are simply omitted (ç → C, ð → D, ê → E, ñ → N etc.), but it allows the following transliterations: [...]
You said
> you might even get into legal trouble if you apply that.
We're talking about passports, this seems not relevant. For passport-related use such as travel, you use the form of the name written on the passport, exactly as-is.
Take a look at the spec if you are interested: https://www.icao.int/publications/documents/9303_p3_cons_en.... The transliteration tables start on page 24 and are scattered throughout the document.