At present, it looks like sending to tools.example@tools.wmflabs.org is processed differently to tools.Example@tools.wmflabs.org - tools need to exist with the separate letter cases for this to work correctly. Whilst this is technically compliant with RFC 5321 (as the host is allowed to define the local part pretty well however they like), it's not standard practice among most email servers.

I'm not sure how the emails are sorted internally on Toolforge, but this may be connected to Exiqgrep being case-sensitive by default.

It's no big deal for this to be a WONTFIX, but it ought to be documented to be the case if it's a design decision - there's currently no indication of this on the relevant documentation at Wikitech.