I think that's a different issue - isn't that just a matter of the filesystem not actually enforcing full case-insensitivity? I would expect a case-insensitive file system to be able to deterministically pick one or the other, ie. reject naming a file "File.txt" if there already existed a file "file.txt" in that directory while still preserving the casing of whatever filename I originally gave it.
It's not really about issues within your own case-insensitive file system. It's more about the inevitable issues that arise if you physically plug in, or mount over the network, a drive with different case-sensitivity rules.
Even on windows, you can obtain a variety of 3rd-party drivers for natively case-sensitive file systems (ext3, HFS+, and so on). These drivers have to perform some truly ghastly file name transforms to ensure that case-insensitive windows APIs don't screw up the contents of the disk.