Case-insensitive ext4

Assuming the lowest layers of the stack could handle conversions transparently (which I'm doubtful of, that would require low-level knowledge about every possible encoding variation on earth), you still need to know the encoding(s) you start with. Meaning, you have to put at least one pivot encoding definition inside your filesystem.

That's the part people object to, because they are used to the simplicity of pushing encoding problems somewhere else, with "filenames are streams of bytes". Which was not true even for original UNIX. Actual original Unix filename bytes were 7bit ASCII bytes and nothing else.

But 7bit ASCII is useless in a modern i18n world. So you need to record other pivot encoding(s) in filesystems¹.

¹ Record, not reproduce the mistake of original UNIX, that assumed there was a single encoding that would never evolve so there was no need to make it explicit; easy mistake to made in the simpler computer age they lived in; inexcusable mistake to make today.