In Book and Quill, we can format text by using § (section sign) and an alphanumeric character. However, in order to input the section sign, we have to copy the character from a text editor or web browser and paste it into the Book and Quill.
I would be expecting that, with my QWERTY keyboard, I can type the section sign directly in the Book and Quill, especially when I hold Alt and press 0167 on my Numpad.
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..And in command blocks I couldn't even paste it 😞
(The pasted line just showed up without the §)

This is intentional. Though format codes are "supported" almost everywhere, we do not let you use them from within the game.
Sadface. TO THE NBT EDITOR! 😛

But the description says that format codes can be used from within the game – they just must be pasted in from the clipboard instead of typed. Is that supposed to work?
How can this be intentional to not let the user format their books or text that is output by the command block?
I suggest a brand new character to stand for this key. (Sorry I'm using an iPad so I can't type it)
Something like the # key or something.
For world and server names, you can edit the language pack to have something like "§6§6§6New World", so that you can use the arrow keys to get caret in between the § and the 6, which will make it visible. Then you can delete the 6, and use what ever code you want.
Why is this working as intended? Yeah, I found out on one bug tracker that this was to stop abuse from players, but why block formatting codes on any world, regardless of whether it is singleplayer or not?
I think it's because Java Edition uses some sort of JSON format to code format, so section signs wouldn't show up...

If formatting codes aren't allowed for use, surely the section sign itself could be permitted for use in any text field without causing formatting to happen? To my understanding, section sign formatting is largely deprecated anyway in favor of more in-depth NBT formatting, so it should be safe enough to have the section sign be treated as any other character.
you cant even do that in chat either as well. you cant use alt codes in chat so guessing book/signs follow same rules.