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Let's say you make a package called Assignment4, but then you realize you shouldn't use caps in the name, so you try to rename it to assignment4, it won't let you. It says there is a package with the same name (but different caps) that already exists. It doesn't realize that the offending package is the one you're trying to fix, and so should exclude itself from the checking.
This isn't JDT/Core. This limitation comes from Win32 OS. Try to do the same in file explorer.