The game is allowing people to use the same names as each other, only with the capitalization different.

For instance, I'm named "Chibi" in game, and I see another person chatting on the world channel named "chibi" (notice the small "c" in the name, so it let them use the same name as me because of that).

I also tested it again with another name, someone else is already named Anna and it let me make a new character named "anna".

So the game is letting us make the same names just by changing if letters are capital or small letters in the name.  This isn't fun!

I think the "C" is different with "c".