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The "search" part of the template search/replace tool is case-insensitive because it just uses a template LIKE '%WhatEver%' database query. However, the "replace" part is case-sensitive because it uses str_replace(). That can cause buggy search results like these:

   

(Notice that the $label variable is only modified on the second result)

Thank you for your bug report.

This bug has been fixed in our internal code repository. Please note that the problem will not be fixed here until these forums are updated.