Pydoc doesn't parse docstrings at all. Most Python docstrings are written in reStructuredText (definitely the case for the scientific Python ecosystem). For example, here's pydoc's docs for ...

Today we're excited to announce our latest project: https://pydoc.io. This work was made possible by the :doc:`MOSS Grant </rtd-awarded-mozilla-open-source-support-grant>` from Mozilla. Thanks to ...

A new project from Read the Docs aims to automatically generate API documentation from code uploaded to the Python Package Index Read the Docs, a popular community-supported service for creating ...