This behaviour is locale specific, and I think this behaviour is correct
for certain locales. For example in my locale (en_GB.UTF-8), the files
in your example are ordered in the way you believe is correct (a, b, C).
If the behaviour you are seeing is not what you expect, then it's more
likely a local config issue rather than a bug.
What locale are you using? (please post the output of "locale")
** Changed in: nautilus (Ubuntu)
Importance: Undecided => Low
** Changed in: nautilus (Ubuntu)
Status: New => Incomplete
** Changed in: nautilus (Ubuntu)
Assignee: (unassigned) => Ubuntu Desktop Bugs (desktop-bugs)
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File ordering should be case-insensitive
https://bugs.launchpad.net/bugs/505571
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Desktop Bugs, which is a bug assignee.
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