Q. These two examples are given in CMOS section 6.77: “My name is Phyllis; that’s p-h-y-l-l-i-s.” “A proficient signer can fingerspell C-O-L-O-R-A-D-O in less than two seconds.” Why are the separated letters caps in one example but lowercase in the other?

A. Because both ways are commonly used, and both work well!