Working with UTF-8 in the kernel

> It will do case-folding based on the locale of the user who mounted the overlay.

But that behavior would be pretty awful -- which files you can access depending upon your current locale? There's a reason filesystems (including this ext4 proposal) store the mapping used when creating the filesystem...

> without *at least* a user-space proof-of-concept system.

Two have been mentioned already. Android has an overlay filesystem for local access, and samba implements it when exporting the filesystem over the network.