This had to do with wallet implementations I think - because not all can process upper case bech32 addresses.
You should avoid using such tools that can not process upper case bech32 addresses because that is a bug in their implementation as the said encoding is not case sensitive and should only reject mixed case strings.
I agree, although it looks OP's customer is the one who use buggy wallet. So asking the cashier to make suggestion about proper wallet to customer seems to be tricky.
did look for command line arguments on wallet options but to no avail (so can be specified when starting Bitcoin core). Any tips on an work-around are appreciated!
One possible workaround is by changing default type of generated address by adding this line on
bitcoin.conf file. Take note
p2sh-segwit refer to address with prefix
3.... Other possible option are
legacy and
bech32.
addresstype=p2sh-segwit
P.S. Tested with Bitcoin Core 23.0.