If default-directory is a remote directory, shell-command (M-!) executes
the command on the remote machine, but shell-command-on-region (M-|)
executes it locally.

This is more of a feature request rather than a bug report, but it might
be nice if shell-command-on-region executed the command remotely as
well. Or perhaps, a new command called something like
'shell-command-on-region-file' could be added that executed the command
remotely.

Thanks, best regards.