Apparently, case sensitivity of identifiers in SQL Server is affected by the collation rules in use:
https://learn.microsoft.com/en-us/sql/relational-databases/databases/database-identifiers?view=sql-server-ver16
https://learn.microsoft.com/en-us/sql/t-sql/statements/collations?view=sql-server-ver16
https://learn.microsoft.com/en-us/sql/relational-databases/collations/set-or-change-the-database-collation?view=sql-server-ver16
Changing the database collation affects the collation of things like table and column names. Why that was considered a good idea ...