Because it’s designed for average people
It is not. It is designed for all purposes, automated processes and people alike. A filesystem is not just for grandma's Word documents.
And even people's names are case sensitive. My name has the format Aaa Bbb ccc Ddd. It is not the same as the person with the name Aaa Bbb Ccc Ddd, who also exists. So why shouldn't file names be?
Imagine a table in a database where the primary key is a case sensitive character field, because you know varchars, just like C char types and string types in other languages are case sensitive.
Imagine a database administrator does the following:
Imagine a second database adminstrator around the same time does the following:
Now imagine this is the GDPR data of two different users.
If you have a case insensitive file system, you've just overwritten something you shouldn't have and possibly even leaked confidential data.
If you have a case sensitive file system you don't have to account for this scenario. If the PK is unique, the filename will be unique, end of story.