OK here's what I did:
FIND IN libs/ubbthreads.inc.php:
look for
$title = preg_replace("#(&(amp|gt|lt|quot);|[^a-zA-Z0-9_])+#", " ", $title);
$title = str_replace(' ', '_', trim($title));
$title = substr($title, 0, 30);
add
//LISA ADD 4/18/15 SO LOWERCASE URLREWRITE WORKS
$title = mb_convert_case($title, MB_CASE_LOWER, "UTF-8"); //convert to lowercase
That now works. It properly shows only lowercase URLs so then combined with my lowercase enforcement rule the system works. Can we please have this in the upcoming main code change, too? Is there anybody that actually wants mixed case to preserve?