When one creats such wikilink [[Alūksnes pils]]drupās, the link (red or blue, it doesn't matter) are just for Alūksnes pilsdrup part, ās doesn't get wikilinked. The same happens also if you change ā to for example ģ, so it should be encoding-related issue. Tested at Latvian and English Wikipedia.
Each locale has its own set of "link trail" characters which automatically get absorbed into wikilinks. The link trail is currently not set for Latvian.
I guess you have a good point, I wonder why the default (English) link trail does not include other Latin-alphabet characters. Any i18n experts who can answer that?