I had dinner last night with Jon Stopa, one of the people who started Advent Books way back when. Most of Knight's In Search of Wonder
was assembled from magazine reviews in Jon's collection. I told him about our discussion here.
Jon recalls that "damon knight" was often uncapitalized (um, minusculized?), though he doesn't recall the reason why. (But it was fun to hear old Advent stories.)
In 2009 Fred Pohl recalled this, too, writing: "That’s the way he used to write his name, all lowercase, changing to the conventional capitalized form when he got his first editorial job
Earl Kemp (who typeset Advent Books) wrote, as a footnote to F. M. Busby's reference to "knight" in Who Killed Science Fiction?
: "The lower-case 'k' is not a typographical error; it is a reference to a fannish-days affectation of Damon Knight of lowercasing his own name."
So I think I have that nailed down, and I should probably stop, lest readers consider me obsessed.