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From what I’m seeing, lowercase is what they’re using. I’ve not personally used uppercase with tags in the past though.
I can confirm that when trying to tag from within the control panel, anything uppercase is converted to lowercase. The same when using doctl from Terminal. Passing uppercase tags results in lowercase conversion.
There was a change a week ago, where renaming tags was deprecated. https://developers.digitalocean.com/documentation/changelog/api-v2/deprecating-update-tag/
And reading the documentation, doesn’t state that tags are only lowercase: https://developers.digitalocean.com/documentation/v2/#tags
Maybe something changed last week, which hasn’t been documented. You should create a ticket to get an official answer.