Definitely a bug, so I'm not sure why this is in the Wishes Forum... unless we're wishing for a bug fix? 😀
The new Attributes dialog DOES let us change the case of any folder name without complaint. The bug described only happens (to me) for the exact same folder in its own attribute dialog.
For example, in the new Attribute Manager (no columns), I can change GLASS to Glass or whatever.
But, in the Surfaces dialog, I get the message described.
One of the forum moderators • AC 26 USA and earlier • macOS Ventura 13.2.1, iMac Pro 10-Core, Radeon Pro Vega 64