This "cute" style reuses the Unicode circled-letter block, the same enclosed alphanumerics used for bubble text, because rounded, enclosed shapes read as softer and friendlier than sharp Latin letters, which is why it's a popular pick for cute usernames. Every bubbled character is a single Unicode code point, not a decorated image, so it stays fully copy-pasteable and searchable anywhere Unicode text is accepted. As with any enclosed-character trick, coverage is limited to letters and digits, accented characters, emoji, and most punctuation are left unchanged since Unicode has no circled version of them.
They use the same underlying circled Unicode character set, this version is framed for cute/soft branding, but the actual character mapping and output are identical.
It works for bios and display names, but most platforms restrict the actual @username field to plain ASCII letters, digits, periods, and underscores, so save styled text for your bio or nickname instead.
There's no circled Unicode character for a blank space, so the space character passes through untouched to keep word boundaries readable.