They made a case-insensitive version of NTFS just to store your password

It is case-preserving, but not case-sensitive.

So, it will show you what was entered and make you think it’s case-sensitive, but then when you go to do the comparison, it actually ignores case.

The stupid thing is that MacOS was also case-preserving but not case-sensitive for a long time.

APFS still defaults to case-preserving:

    [nathell@macmini /tmp]$ echo first > A
    [nathell@macmini /tmp]$ echo second > a
    [nathell@macmini /tmp]$ cat A
    second

That's how Windows will behave but not actually how the underlying filesystem does.

I think it’s internally case sensitive and provides case insensitive APIs to users, right?

Right, win32 is insensitive