This is speculation, but I suspect what is happening is that while the notification process doesn't run in kernel space, a text processing library does. The unicode wstring is being sent into that library with the request to "draw this text!" (to ultimately a buffer/bitmap) and when the text processing library attempts to process the unicode string, it chokes on part of it, crashes in kernel space and iOS panics and resets.
This is speculation, but has happened before. The "good news" is that it is likely not usable to install malware or to inject running code into kernel space. The "bad news" is that people can continue to DDoS each other until it is fixed (and maybe via other apps which have notifications, like email, assuming it pushes unicode strings into the notification).
The only interesting question is why this crashes iOS with notifications but NOT with just viewing the text in the Message app? That I'd love someone to dive into (e.g. do they use different libraries to draw text?).
It doesn't sound like it's a kernel panic, though; based on the description, it sounds like the issue is with the UI ("Springboard"), which explains why jailbroken devices (which usually have Cydia's "substrate" installed to catch Springboard crashes) are kicked to "safe mode" instead of outright crashing.
The most plausible hypothesis I've heard so far (mixed with my own speculation) is that whatever code handles notifications runs into some sort of resource exhaustion (whether it's a memory overflow or an integer overflow or somesuch), causing Springboard to segfault. Cydia's substrate catches this on jailbroken devices, causing Springboard to enter Safe Mode (which is unaffected by this bug), while non-jailbroken devices - unable to handle Springboard crashing - resort to rebooting.
you're right about the springboard bit. as for the crash itself, it's easier for me to just to quote a reddit comment:
"It only works when the message has to be abbreviated with '...'. This is usually on the lock screen and main menu of Messages.app.
The words effective and power can be anything as long as they're on two different lines, which forces the Arabic text farther down the message where some of the letters will be replaced with '...'
The crash happens when the first dot replaces part of one of the Arabic characters (they require more than one byte to store) Normally there are safety checks to make sure half characters aren't stored, but this replacement bypasses those checks for whatever reason."
TL;DR: This string of characters will crash an iPhone. People have shown this is related to the way notifications are displayed. Therefore, anytime this shows up in a notification, the iPhone will restart. Affects the Apple Watch too. There's more info and speculation in the reddit comments.
This is speculation, but has happened before. The "good news" is that it is likely not usable to install malware or to inject running code into kernel space. The "bad news" is that people can continue to DDoS each other until it is fixed (and maybe via other apps which have notifications, like email, assuming it pushes unicode strings into the notification).
The only interesting question is why this crashes iOS with notifications but NOT with just viewing the text in the Message app? That I'd love someone to dive into (e.g. do they use different libraries to draw text?).