

Case insensitive is more intuitive
Are these the same filename?
- ΑΓΑΘΉ.txt
- αγαθή.txt
What about these?
- MY-NOTES-ON-Δ.txt
- μυ-notes-on-δ.txt
Databases have different case-insensitive collations - these control what letters are equivalent to each other. The fact that there’s multiple options should tell you that there’s no one-size-fits-all solution to case insensitivity.
This issue is only simple and obvious if you don’t know enough about it.
Hardly, I’m directly addressing your statement that case insensitive is intuitive to users, grandmas or otherwise - I give examples where it’s not initiative or obvious which filenames match. I didn’t mention ease of implementation at all.
The principle of least surprise is an important UX consideration, and your idea of effectively introducing collation and localising which files conflict is just trading one problem for another set of problems and suprises (e.g. copying directories between drives with different settings).