Open a new blank spreadsheet.
Define the named range xxyy
Define the named range xxYy. You can do this because you can move the cursor back and edit the interior letters of a word without them being autocorrected.
If you then enter the formula "=xxyy" in a cell, it is ambiguous which of those definitions you'll get. In practice, it's the lexically earlier one, in this case xxYy.
It seems to me that the check whether a new named range conflicts with an existing one should be done case-insensitively (though naturally the name itself should remain case-sensitive).
please don't add blockers to bugs as long as they are unrelated and even if they are this is a bad idea