Case sensitivity defines whether uppercase and lowercase characters are treated as distinct or equivalent.
DESelect Segment, like Salesforce Marketing Cloud, is not case-sensitive in the filter values used inside a Selection and therefore does not differentiate between uppercase and lowercase characters.
For example, the words 'Value' and 'VALUE' would be treated as equals.
However, DESelect Segment is case-sensitive when it comes to the names of the Selections, or folders created in it: you could have two Selections/folders named "test" and "TEST" and they'd be treated as different Selections/folders.
In DESelect Segment, you can create subfolders on the Home page that have the same name as a parent folder or any other folder, but not on the same level.
DESelect Segment is also case-sensitive when it comes to defining the Default Send Relationship field in the Admin Panel > Settings.