We've been hit by this bug for quite some time. I just did bisection and this is what I found:
2.120 is the last version that allows you to create users with dots.
2.121 onwards: block usernames with dots, with the following warning: User name must only contain alphanumeric characters, underscore and dash.
2.128 onwards: user isn't created, stays on the same page, no warning is shown (reported behaviour)
Does that mean dots are disallowed in usernames by design? If so, what's the motivation behind it?