I remember it back in the day as fully capitalized.
Now that the TorProject has opted to correct the record, it is too little too late. Most presentations at the time did use "TOR" and it was called the TOR router. Even they understand the acronym comes from the original onion routing project from the Naval Research Lab.
All that to say, I don't know why they would try to distance themselves from what it was, and what it still is.
Maybe they changed it because it seemed redundant to say "TOR router" (like ATM machine)... :)
Either way I don't mind, but personally I think "Tor" looks more professional, less shouty, and doesn't conflict with "top of rack" router/switch (which is a thing in datacenters). I have noticed that the Tor project is pretty protective of their brand, e.g. if you start a project including "Tor" in its name they will complain and ask you to clarify lack of affiliation.
Now that the TorProject has opted to correct the record, it is too little too late. Most presentations at the time did use "TOR" and it was called the TOR router. Even they understand the acronym comes from the original onion routing project from the Naval Research Lab.
All that to say, I don't know why they would try to distance themselves from what it was, and what it still is.