So here is what I've found out:
The base SMTP email address specification (RFC 5322 Section 3.4) does not allow email addresses outside a limited subset of the 7-bit ASCII range. In order to support email addresses like the one in the question both the sending and receiving email servers need to support an extension to SMTP called SMTPUTF8 defined in RFC 6531.
According to a conversation I had with Amazon SES's support team SMTPUTF8 isn't widely supported currently (23 Nov 2017) and as such they don't support it either. Their development team is working on it, however they have no idea when, or even if, it will make it to production.
The following comment that is currently in the .Net SDK documentation about MIME Encoding seems to be somewhat of a red herring.
By default, the string must be 7-bit ASCII. If the text must contain
any other characters, then you must use MIME encoded-word syntax (RFC
2047) instead of a literal string. MIME encoded-word syntax uses the
following form: =?charset?encoding?encoded-text?=. For more
information, see RFC 2047.
Since I chatted to Amazon about this they seem to be correcting some parts of the documentation a better description can be found in the API documentation.
Amazon SES does not support the SMTPUTF8 extension, as described in
RFC6531. For this reason, the local part of a destination email
address (the part of the email address that precedes the @ sign) may
only contain 7-bit ASCII characters. If the domain part of an address
(the part after the @ sign) contains non-ASCII characters, they must
be encoded using Punycode, as described in RFC3492.
unicode(sender, 'latin-1').encode('utf-8')– Intoxicant