[emergie]

I had same thoughts. Uppercasing the first "character" is a wrong way of achieving titlecase.

'dz' digraph may be expressed in few ways:

  dz - \u0064\u007a, 2 basic latin block codepoints
  DZ - \u0044\u005a
  Dz - \u0044\u007a
  
  dz - \u01f3, lowercase, single codepoint
  DZ - \u01f1, uppercase
  Dz - \u01f2, TITLECASE!

Uppercasing the first character works only if the original text used 'dz' in decomposed two-characters form.

Similar thing happens with transliteration. You cannot just transliterate Þ -> TH because then transliterating something like Þorlákshöfn would yield THorlakshofn.