There is use case for the '#' pound sign.
As my personal use case goes i have a directory of movie franchises in a glossary view (from views, terms are taxonomy terms) and each "group in the glossary heading" has an anchor which uses the '#' pound sign.
So the pathauto term URL should for example for ghostbusters read "/cinema/by-franchise/g#ghostbusters" (the g is a field on the term page as a truncated first letter of the term name)Even i go to the settings and change the setting for '#' under punctuation to not alter '#' it still says "invalid character for the above URL.