This means that should be general MediaWiki policy and it should not be used only on Wikipedias where communities are strongly against it. So, Names.php should be with small letters in the main distribution, but it should be changed for Wikipedias where communities are strongly against.
Millosh, with this you are making the assumption that it is correct orthography for all those languages -- including some you've probably not heard of, like Venda, Herero, and Chamorro -- and this is not the case. In some cases it is correct orthography, HOWEVER in others it is not. It should be on a case-by-case basis, rather than switching all to lowercase.
Obviously you know best about Serbian, Croatian, Serbo-Croatian, and Bosnian, but instead of changing all Wikipedias we should have a vote at each one, or find if it is correct orthography.
Mark