Thanks for your question.
As per below Microsoft document
https://learn.microsoft.com/en-us/azure/mysql/flexible-server/concepts-limitations
the lower_case_table_names value can only be set to 1 in Azure Database for MySQL - Flexible Server and it's a static parameter.
MySQL public docs (https://dev.mysql.com/doc/refman/8.0/en/server-system-variables.html#sysvar_lower_case_table_names ) says:
It is prohibited to start the server with a lower_case_table_names setting that is different from the setting used when the server was initialized. The restriction is necessary because collations used by various data dictionary table fields are determined by the setting defined when the server is initialized, and restarting the server with a different setting would introduce inconsistencies with respect to how identifiers are ordered and compared.
Thank you!