Here is the input:
\documentclass[12pt]{article}
\usepackage[T1]{fontenc}
\usepackage[latin1]{inputenc} % my emacs saves this file with latin1 encoding
\usepackage{url}
\begin{document}
\urldef{\urlex}\url{https://e.g/page#§}
\noindent
The § sign appears as \u{g} in the URL:
\begin{itemize}
\item The URL: \urlex
\item A § sign in tt font: \texttt{§}
\end{itemize}
\end{document}
And here the rather surprising result from a pdflatex run:
Note that Emacs properly saves the file latin1 encoded. It does not seem to be a problem with inputenc as the paragraph sign is properly set in the cm font and also outside of the URL in tt font. Does url fiddle around with the input encoding?
Any idea?

utf8input encoding by default? – Bernard Dec 19 '21 at 14:51(1) utf8 does not solve the problem but introduces new issues; (2) I don't want
hyperrefbecause it also produces links from other references. – ThomasS Dec 19 '21 at 15:10\url{}. That's why I stick with ISO-Latin-1. – ThomasS Dec 20 '21 at 05:34