Both. It does certainly qualify as a bug and there is a particular reason for it.

Folders in Thunderbird correspond to files in mbox format within the user profile folder. When you tell Thunderbird to change the name of a folder, you're telling it to change the name of the corresponding mbox file in the filesystem. Now, filesystems can be case sensitive or insensitive, meaning filenames that vary only in case may be considered to be different or not. So my guess is that before renaming the mbox file, Thunderbird checks whether a file with the new name already exists in that location, and if the filesystem is case insensitive, the result will be that yes, a file with the new name already exists, namely the very file it's trying to rename… :)

Fortunately, this has an easy workaround. Just rename the folder to something different first, then rename it to the name you want.

Thank you for your quick response. The (Linux) filesystem I use is case sensitive. It discriminates perfectly between "stuff" and "Stuff". I have been using the workaround for some time, but it seems a bit clumsy and unnecessary. So I wandered if it could be amended.

Ah! It must be Thunderbird itself that somehow does the check in a case insensitive way regardless, then. It sure can be fixed and you may report it. Don't know what's the exact URL and procedure to do it right now, but I'm sure there is one. It may have already been reported even.

Looked on bugzilla and found that this has been an open issue for 24 years! (Sorry for the exclamation mark) Some work has been done, but the last comment pertaining to some effort to resolve this, is from 6 years ago. Unclear what we can expect, so I posted a question to this end. cannot rename a local folder to its current name with different case