Entropy here is referring to how random the user's password is, and thus how difficult it will be to guess it. For example, a four character password which can be comprised only of lowercase a-z has much lower entropy than a four character password which can have A-Z and a-z (and the case is significant).
I may be misunderstanding it. But they are switching the case, not turning it lowercase. So trying both AbCd and aBcD, because that's what you'd type if caps lock was on.
