It's a big deal in anything dealing with permitted/excluded names because once you take the insane C/Posix locale rules into account you end up with nondetermin

It's a big deal in anything dealing with permitted/excluded names because once you take the insane C/Posix locale rules into account you end up with nondeterministic comparison results: compare a with b, get a match, another thread changes the locale setting, compare the same a with b, get a non-match. You've also got nontransitive case-changes, e.g. toupper('ı') = 'I', tolower('I') = 'i', 'ı' != 'i'. This means that an attacker can get around any name-based checks by choosing a character set that compares however they want it to, which is why a lot of OSS security projects implement their own guaranteed-deterministic comparison functions, e.g. WireGuard's built-in replacement for the ctype.h macros/functions.