There used to be an extension bundling different slug systems, this was before Flarum even made the slug properly extensible, but the extension was dropped because it turned out the bundled options weren't much better than what Flarum ships with.
We are using Laravel's Str::slug() utility, itself using the portable-ascii package.
I believe that enabling the php-intl extension gives portable-ascii a bit more power, so if that PHP extension isn't already enabled on your server I'd recommend trying that. You'll need to edit the title or create new discussions to see a change.
If you want to try to implement a custom slugger, you should be able to macro the Laravel slug method, or take a look at how the old fof/transliterator extension worked and adapt it. PS: Flarum has a slugger interface system but it's actually related to how the URL is composed from database columns, but not actually related to how a discussion slug is generated and stored for future use.
