Can custom module function names contain characters between 7F and FF? PHP defines valid function names as [a-zA-Z_\x7f-\xff][a-zA-Z0-9_\x7f-\xff]*.

I have already been bitten by Drupal name conflicts when using hook_form_alter clashing with my module name when it contained common words separated by an underscore "_" ("isys_helper_form_alter").

So I thought about using the broken pipe character instead like I have done in other PHP projects ("¦", char #A6, "isys¦helper_form_alter").

Unfortunately, Drupal does not seem to find any functions I name using characters in the 7F to FF range.

Is this a documented difference with Drupal vs. PHP?

Searching the documentation online did not state any such difference, but I could have missed it.
That's a bad idea. Please refer to Drupals Coding Standards under the section Naming Conventions. 

In my opinion function/class/var names shouldn't contain anything else than A-Za-z0-9_.

If you don't want isys_helper_form_alter to be picked up by Drupal, you can always prefix it with an underscore: _isys_helper_form_alter.

Update

Here's another topic on why other characters are bad: https://stackoverflow.com/questions/6362241/php-variable-function-class-names-using-special-characters. And even if you remember to save it in the right encoding, other people who needs to maintain your code later on might not do that.