question What is restricted on the Registry level?

It's because sometimes the registrar you are at has a bad connection to the restricted/premium lists of some registrars. Can be for a few reasons like a bad connection, or the database server is down for maintenance, etc. For some small registries there simply might not be enough reserved domains to justify maintaining a database, in which case you'll get an error every time.

For .com, all 1 and 2 character domains that did not already exist before a certain date are not allowed.

ALL TLD's have NIC.__ reserved as it's supposed to be what the registries use to post info about that specific registry.

Many ccTLDs have domains with national significance reserved. Such as {city}.ca or Canada.ca.

Obviously many ngTLDs have domains reserved as premiums where they reserve them for people willing to pay higher prices.

I had something unusual like that happen when I was registering Banking.cx through namecheap. It said the name was available, but when I tried to register it, it failed and said the name did not exist. Then I got several emails from namecheap saying the name was approved by the registry. To make a long story short, I'm pretty sure I got the name for free. An unusual situation it was though. Took a week or more to get it to show in my account, while it showed as registered in whois.com several days in advance.

20ish years ago (long before I was a domainer) I actually had the single character domain -.com in my account (dash dot com) before it eventually got removed.

So to add to the list, no domain can start of end with a dash. (I'm not sure if ccTLDs and ngTLDs also have that rule in a similar way that they are allowed to sell single charater ngTLDs).

Also .. many TLDs do not allow for certain or possible subsets of xn-- within domains (puny code / emojis). Pretty sure .com only has about 7 emoji domains that were grandfathered before hey stopped allowing them.

When I mentioned no 1 or 2 character domains for .com before a certain date, note that that date was sometime around 1993 ..

https://www.midphase.com/blog/where-are-all-the-single-letter-domains/#:~:text=In 1993 the Internet Assigned,digit domains in .com,

Some domains, even though are technically acceptable as per DNS internet standards, simply cannot be registered. They would be shown as "free" or, depending on whois setup, "reserved" or similar. So, it appears that NameCheap responded correctly. The reason is the meaning of domains in question. The lists are determined by ICANN, registries and/or local authoriries in cases of country codes. Such domains are related to Red Cross, Olympic Committee, GNSO, icann and other internet regulators, country names (states, territories), etc, etc, etc.
On a spot view:
https://www.icann.org/sites/default/files/packages/reserved-names/ReservedNames.xml
https://www.icann.org/resources/country-territory-names
https://www.iana.org/domains/reserved
https://www.icann.org/resources/pages/appendix-06-2012-12-07-en