Maybe the important thing in my setup is that I am not creating new users, I am migrating old users by name, I have

$wgOpenIDConnect_MigrateUsersByUserName = true;

so the original non-capitalized preferred_username is used for searching for the old user.

I am using MediaWiki 1.34.1 (the latest in this moment) with OpenIDConnect extension downloaded from https://www.mediawiki.org/wiki/Special:ExtensionDistributor/OpenIDConnect which contains file "version" with the following content:

I do not have access to gerrit, but I have spent several hours today searching why login through OIDC is failing, and I have found that if I make this one-line change, it starts working. So you may consider the change to be already tested on my system.

But its result is not used. Please note that the result of calling Title::makeTitleSafe() is stored into the variable $nt, but returned is the variable $preferred_username which holds the unmodified string without capitalized first letter.