OK, I've found the gross reason why the 2^16 + 2^20 arithmetic works:
"The Unicode standard permanently reserves these code point values for UTF-16 encoding of the high and low surrogates, and they will never be assigned a character, so there should be no reason to encode them. The official Unicode standard says that no UTF forms, including UTF-16, can encode these code points."
"The Unicode standard permanently reserves these code point values for UTF-16 encoding of the high and low surrogates, and they will never be assigned a character, so there should be no reason to encode them. The official Unicode standard says that no UTF forms, including UTF-16, can encode these code points."
Ugh.