The drive uses the new Apple filing system. It's labelled "APFS (Encrypted)"
I have no idea what that means regarding its being case-sensitive. I checked, and the CD is correctly labeled "EXILE Disc 1"
A probably related fact: after I got the message, the icon for the CD disappeared from my desktop, and I was unable to eject the CD.
I tried again while I was writing this post, and it worked... so thanks, lol. For future reference, I was using other applications while the installer was running, but I didn't this time around. Maybe that's the difference?