The main problem with case-insensitive is that software sometimes is lazily developed: If a file is named “File.txt” and a program opens “file.txt”, then on a case-insensitive file system it will work fine. If you then format your drive to case-sensitive, the same software now fails to load the file. Source: tried case-sensitive filesystem on macOS some years ago.
More specifically, Play Integrity API will fail on the Play Service integrity check. If I recall correctly, this is why Google Pay won’t work on GrapheneOS.
Some banks require the app to be used as second factor to log into their website.