Changing capitalization in a newly created folder gives already exists message

Changing capitalization in a newly created folder will not rename folder and the user will be presented with "A folder already exists at this location with this name.

Also occurring in 5.0-Release

This is not a regression due to it occurring in 4.27.

1. Open any project
2. Create a new folder names "MyFolder"
3. Rename the folder changing the first letters capitalization "myFolder"

Result: A folder already exists at this location with this name.

Expected Result: The folder should be renamed.