Title case not always converting the case

[ProgerXP]

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This is inherited behaviour of Notepad2: select AAA, Ctrl+Alt+I - result is the same but do the same on AaAa - result would be Aaaa.

Why this exception with all-uppercase words?

[cshnik]

It looks like specified behavior is an algorithm's feature of title case transformation: under specific conditions upper case letters can be treated as acronyms:

ToTitleCase() takes a very simple approach to title casing. Maybe in the future it'll be smarter, but for now it just uppercases the first letter in a group of letters, and tries to pay attention to non-letters and word breaks. It also tries to keep acronyms all upper-case.

Please check this article for details: What is Title Case?