This character was code 0x01 in the original IBM PC code page (https://en.wikipedia.org/wiki/Code_page_437), and hence in DOS. It was displayed single-width and monochrome just like any other 8-bit character, never causing any rendering issues, unlike emojis today. It was added to Unicode for round-trip compatibility with that code page.

More background about how the smiley ended up in the IBM code page: https://www.vintagecomputing.com/index.php/archives/790/the-...

Single code point, monochrome and single space. So it didn't need to be handled differently than any other non-ASCII character.

BTW, it is emitted with the sequence `Compose` `:` `)` (if you have Compose-key support installed+enabled)

UTF-8 was developed by Rob Pike and Ken Thompson on a napkin in a diner and implemented in Pikes Plan 9 making it the first UTF-8 OS.