• I have tried with the latest version of Docker Desktop: 4.7.0 (77141)
• I have tried disabling enabled experimental features
• I have uploaded Diagnostics
• Diagnostics ID: 116FD774-2C99-4A8C-BF92-EF80DBC51A71/20220409035537

Actual behavior

PS C:\envTest> type .\docker-compose.yaml
version: '3'
services:
  alpine:
    image: alpine
    environment:
      - envTest
    command:
      - sh
      - -c
      - |
        export|grep envTest
PS C:\envTest> docker-compose -v
Docker Compose version v2.4.1
PS C:\envTest> $ENV:ENVTEST="foobar"
PS C:\envTest> docker-compose run --rm alpine
PS C:\envTest>

Expected behavior

Behavior with docker-compose v1:

PS C:\envTest> type .\docker-compose.yaml
version: '3'
services:
  alpine:
    image: alpine
    environment:
      - envTest
    command:
      - sh
      - -c
      - |
        export|grep envTest
PS C:\envTest> docker-compose -v
docker-compose version 1.29.2, build 5becea4c
PS C:\envTest> $ENV:ENVTEST="foobar"
PS C:\envTest> docker-compose run --rm alpine
Creating envtest_alpine_run ... done
export envTest='foobar'
PS C:\envTest>

also with docker run:

PS C:\envTest> docker -v
Docker version 20.10.14, build a224086
PS C:\envTest> $ENV:ENVTEST="foobar"
PS C:\envTest> docker run --rm -e envTest alpine /bin/sh -c export|findstr envTest
export envTest='foobar'
PS C:\envTest>

Information

• Windows Version: Windows 10 Pro 21H2 19044.1586 (x64)
• Docker Desktop Version: 4.7.0 (77141)
• WSL2 or Hyper-V backend?: WSL2
• Are you running inside a virtualized Windows e.g. on a cloud server or a VM: No

docker-compose v2 treats environment variables on Windows case-sensitively.
Windows itself treats environment variables case-insensitively
and as far as I tested, docker-compose v1 and docker does so.

This problem is reproducible. No same issue looks reported.

I don't know this problem appears with an update.
I found this when I launched containers using http_proxy/https_proxy environment variables and found it doesn't access to network. I haven't launched them for months and don't know since when this problem appearred.

Output of & "C:\Program Files\Docker\Docker\resources\com.docker.diagnose.exe" check

diagnose-output.txt

Steps to reproduce the behavior

Described above.