Yes, this is a known problem and will be fixed. It is a side effect of the regular expression support that was added. We are working on a solution and it will be incorporated into the next build.
In the meantime you can work around the issue by removing the MRU list of search strings from the CSLiveViewer.ini and/or CSFileViewer.ini files. These files are located in the <user>\AppData\Local\Raize\CodeSite\5.0 directory. If you edit the ini file, you can remove the [MRULists] section from the INI file and restart the viewer.
Another option is to enter a new search string that starts with what you want in the correct case and then delete the ending letters (not backspace, but delete). For example, in the "State" vs. "state" example, enter "States" into the edit field. "States" should appear correctly cased. Then select the "s" at the end of the string and press the Delete key. The case should be preserved and then clicking OK will search for that string.
Certainly not ideal, but it should get you passed the issue.