Very interesting, was just searching for this but.. have the OPPOSITE problem. It seems the form automatically makes everything an upper case when it is the first character.. but this also happens with email addresses which are always lower case!
I thought to have seen a function where you tell to automatically create capitals, but apparently that also makes capitals out of the first character of an email address?
It is usually css that controls what case a field is forced to (if any). Most fields in cs-cart do not have any transforms done on the case of the input text. So possibly it was added to your site or an addon has provided css that is reaching beyond the intended scope. The php function to make a string "title case" is ucwords() and to make a string all upper is strtoupper() and to lower is strtolower(). But most likely, you have css that is transforming the input text. Suggest you "inspect" the code with your browser inspector and see what css is associated with that input field. If you see something like: "text-transform: uppercase" (or lowercase or capitialize) then you'll want to dig down and find the source of the css.