Thank you ohrenkino and DetlevD for your input.
My system does not allow files with the same name and different cases to exist in the same folder.
It is definitely case insensitive. (see attachment)
And it is not only a difference between flac and FLAC.
Anything other than lower case causes the same incorrect icon: Flac, or fLac, or FLac, or FLAc, etc. etc.
And it is not only flac files that are affected, but also ape, mp3, m4a, wv, and wma.
My system is configured to open each of these file types with the same program (MediaInfo).
This happens successfully by double-clicking, no matter what case is used for the extension.
I associate file icons in what is probably an unorthodox way and I initially thought that may cause my problem.
But then I tried with an asf file, a file type that I have never used before, and found the same behaviour even when associating the file in the usual way.
Mp3tag v2.66 associated icons with file types exactly the same as Windows Explorer (ie with no difference based on case).
Mp3tag v2.71 seems to give the wrong icon if the case of the file extension is anything but all lower case.
In other words, the only difference is the version of Mp3tag.
The attached image shows the same files loaded in 2 versions of Mp3tag, with the same registry values and file associations.
Doesn't that mean that there has been some change in the way Mp3tag handles file icons?
It would be helpful to know exactly where and how Mp3tag obtains the file icons.