File names that differ only in case (uppercase vs lowercase letters) may be considered the same or distinct files depending on the underlying operating system and file system. Windows, using file systems like NTFS, treats "FILE.TXT" and "file.txt" as the same file because it is case-insensitive by default. Conversely, Linux and Unix-like systems (using ext4, APFS, etc.) and macOS (often using APFS, but configurable) are typically case-sensitive; thus, "Report.pdf" and "report.pdf" would be two separate files.

This distinction impacts several practical scenarios. On Windows, a user cannot have "Project.docx" and "project.docx" in the same folder – they are seen as conflicting duplicates. On Linux, a web developer might deliberately name files 'style.CSS' and 'style.css', referring to them differently in code, which works correctly due to case-sensitivity. Cross-platform development, cloud storage (like AWS S3 which is case-sensitive), and scripting often require careful handling to avoid errors when moving files between systems.

The primary advantage of case sensitivity is finer control over naming, potentially avoiding accidental overwrites. Its main limitation is causing confusion and file access errors when porting applications or data between operating systems. This can hinder interoperability and requires developers to use consistent casing conventions. Case-insensitivity simplifies file management for most users but offers less granularity. As systems increasingly interact, understanding this file system behavior remains crucial for smooth data handling.