Quotations and Dialogue

Q. I disagree with the following: The runner noted that, “This course is very difficult.” Better: The runner noted that “this course is very difficult.” Why the comma in the first example? Why uppercase the “T”? Do you agree with me?

A. Yes! Please see CMOS 13.19 for the related guidelines.

[This answer relies on the 17th edition of CMOS (2017) unless otherwise noted.]