MP3tag is still a Windows application.
So somewhere, there is an emulator running. And NTFS (Windows) is not case-sensitive.
To rename a file you cannot only change the case of a letter, you really have to rename it to a new filename (like add an underscore at the end), then apply the new case, then remove the underscore.
No MP3tag bug but due to your environment.
in Upper case
you find an example how to rename files in principle. Perhaps the function $caps() is better for you.