Crud, I forgot about capitalization. No, it's not something that's reasonable to change. The vanilla style is simply all CAPS for location names for the load game menu (which is the text [E]|Water_Palace uses). And VWF didn't change that, so its location name style is all CAPS too. Proper-caser changes it for both of them.
So vanilla should use \call 60A, Relocalized should use [E]|Water_Palace, Reborn can use either, VWF_Edition plus Proper-caser could use [E]|Water_Palace, and VWF_Edition without Proper-caser might not be able to use anything to shorten it so would need a compromised short version.
If you wanted to be maximally technically accurate / consistent, vanilla plus Proper-caser would use [E]|Water_Palace and vanilla without Proper-caser would use \call 60A, but I think this is overkill.
If you wanted to be maximally thorough, 60A could be reimplemented just for VWF without Proper-caser, just for event 0D1 to use it, so that it could use it to reduce space usage to try and match how this patch works for the other 3 event text options.
Aside: I'm never sure of the best way to refer to the 4 available main event script variations, i.e. vanilla, VWF_Edition, Relocalized and Reborn; in some contexts, script, like the script for a play, is clear, but in the context of a big omni-patch like Turbo, there are lots of "scripts" such as animation scripts, AI scripts, etc. and "translation" is inaccurate when only vanilla and Reborn are translations of the main event text (while Relocalized retranslates names and gameplay messages, VWF and Relocalized are embellishments of the vanilla main event text).
Regarding the messed up letters for VWF, I covered how to turn off VWF's special letter encoding for event 0D1 in a previous recent post about this (and mentioned that you'll probably want to use COPY for 0CE, for VWF). Look for the post where I mention Event0D1* and Event0D1^. It's the one where I posted a preliminary version of &(patches)\ExtraCannonTravelRoutes.
I just checked the Flammie Drum error message with VWF and it showed correctly, so I'll probably need more to go on to track down what's mangling that.
Compatibility fixups suck sometimes, don't they? And this is just managing text differences. It requires some pretty heavy duty work when it's things like Item_Limit_Increase that affect the save data format, or when two things want to change the same machine code. Search the ZPS file for "' compat" (note the apostrophe). There are over 200 labeled, and there are plenty more than that that are either unlabeled, or just intentional patching order making things work together. There's nothing magic going on to make patches compatible with each other, just hard work (hmsong, I'm saying this mostly for arbitrary readers; you're already well aware of this considering the compatibility fixups you've done before).