I am excited to give an update re: this issue. We have made the autocomplete search functionality to be case insensitive when searching within the label field, or a custom field that uses the custom field type of labels.
This means when searching for a label within the issue detail view, or basic JQL, the results returned will be case insensitive. Users can still create a separate label that is a different case. E.g. 'Taylor' and 'taylor' will be stored as two different labels if you want to do so.
We believe that making the autocomplete search functionality case insensitive, it will prevent users from creating derivative labels of the same name because users will see all available options regardless of case. At the same time, users are still able to create specific labels by case if they need to. E.g. 'Taylor' and 'taylor' will be stored as two different labels, which is existing functionality.
This should make it much more usable moving forward without negatively affecting what is currently stored as labels in your projects today.
If you have any questions or would like to see anything else re: this issue, please add your comments below.
Senior Product Manager, Jira