You may have noticed that services (even Koala itself) can use all lowercase letters for their Ethereum and ERC20 token addresses, or mix of uppercase and lowercase. It's safe to use any of these formats.
What's important is that you should not try to manually change uppercase letters to lowercase or vice versa. Copy/paste addresses in whatever format they are provided to you and let wallets do the rest.
Koala Wallet's error detection
Addresses in all lowercase letters are accepted, but it can be very hard to spot typos. They are specially dangerous because if any character is changed, the address will remain valid but funds will no longer go to the intended recipient.
Koala Wallet follows the EIP55 specification which encodes a unique pattern of uppercase and lowercase letters to each address. If any character is changed, the expected pattern also changes. If an address has the wrong pattern, it can be assumed that there is an unintended change. The whole address can be considered invalid, preventing you from sending value to an irrecoverable black hole.
Many users will only check a few of the first or last characters of an address when sending. Knowing this, scammers make addresses that start or end with the same characters as of their victim's, trying to pass the wrong ones as legit. By using mixed case addresses, the different pattern of uppercase letters will be different, making the fake addresses much easier to spot even if you only check a fraction of the characters.