The code in the rightmost brackets gets executed first, converting the input string to uppercase.
Then, this value is passed into the leftmost pair of brackets (through the use of an es6 arrow function), and compared against the reversed string.

What is '.toUpperCase() doing here? ( I know what it does but why are we using it here?)

The statement of the original kumite I forked said it's case insensitive so I followed it, though I agree with you that palindromes should have the same capitalization.

I would classify different character capitalization as on either end to nullify being a palindrome, but I guess that depends how strict you want to be with it.