矮 in the world is this happening? All dwarfs are not created (or translated) equally.

In the field of astronomy, the term dwarf star has a long history. That history dates back far before the word police would raise their eyebrows and raise a fuss about dwarf being offensive.

That history has followed the term into the Japanese language, where the expression 矮星 has long been used and is still used to refer to dwarf stars, including on numerous pages of the website of the National Astronomical Observatory of Japan.

In the age of the word police, however, the demotion of Pluto to the status of dwarf planet presented an opportunity for the authorities (at least here in Japan) to make allow the politics of correctness to intrude into language. The result is that the term is treated differently between Japanese and English.

Whereas 星 is accepted for dwarf star in Japanese, 惑星 for dwarf planet is avoided, surely for fear that the word police would coming knocking on the door of offensive transgressors. The NAOJ website gives a nod to the dwarf planet use in English, but avoids mention of 惑星 in Japanese, preferring to use the safer English term dwarf planet in running Japanese text, rather than use the dreaded character.

One example, from a FAQ page of the NAOJ website:

太陽系のdwarf planetとは、「太陽の周りを回り」「十分大きな質量を持つために自己重力が固体としての力よりも勝る結果、重力平衡形状(ほぼ球状)を持ち」「その軌道近くから他の天体が排除されていない」「衛星でない」天体である。

[from https://www.nao.ac.jp/faq/a0508.html]

Another method used to avoid 矮 is to call these dwarf planets 惑星.

I guess the only thing that language realists can be thankful for is that the language revisionists have not banned 星 for dwarf star, but perhaps the day will come when we will see that character banned in dwarf stars as well. Time will tell.