By default, with a UTF-8 database, MySQL will use the utf8_general_ci collation. This results in all string equality comparisons being done in a case-insensitive manner. That is, "Fred" and "freD" are considered equal at the database level. If you have a unique constraint on a field, it would be illegal to try to insert both "aa" and "AA" into the same column, since they compare as equal (and, hence, non-unique) with the default collation. If you want case-sensitive comparisons on a particular column or table, change the column or table to use the utf8_bin collation.
When you issue this command, new credentials are created for your database and the related config vars on your Heroku application are updated. However, on Standard, Premium, and Enterprise tier databases the old credentials are not removed immediately. All of the open connections remain open until the currently running tasks complete, then those credentials are updated. This is to make sure that any background jobs or other workers running on your production environment aren’t abruptly terminated, which could potentially leave the system in an inconsistent state.