Definitely not. That is not what happened. A password with even one letter different, even if it is just a case change, is a totally different password. Apple does not know your password, so it can't use it to encrypt a backup, either with a case change or not. When you enter your password it is enciphered and the enciphered version is compared with the cipher version you entered when you set it up. The original is not stored anywhere, so it is technologically impossible for Apple to use your password to encrypt the backup unless you entered it in response to the prompt the first time you created a backup with Encrypt checked.
Here's an example. Suppose I entered the password MyPassword1. The value actually stored in Apple's server, depending on the "hash" they use, might be 5d9b9d6774e071d5437cdb8094697187f9ffaf2f
Now let's try mypassword1: The stored value using the same hash algorithm (sha256) would be: 099ec7fa52c154f08e0876a09edabd37c39f45a5
There is no similarity, and no way to determine your password from the stored enciphered value.
For any techies reading, note that I am using straight SHA256 without salting. Apple would certainly make it even more secure than I have. With sufficient computing power mine could be broken in about a week.