You're not alone in this problem, @BH6 - we had the same issue reappear last week (for *.c files in our case) after February's problems; we managed to get last week's case escalated to L2, someone there re-rendered the submissions, everything worked great again, and then the problem reappeared today.
The consistent response we've been getting through support channels is "that file format isn't supported" without anyone realizing that the extension is cosmetic and doesn't control the file format. These are simply "text files by a different name." But in order to get good attention to the text file rendering problem, it needs to end in ".txt" right now.
Since I don't know of any way to report on who's using the "accept text file uploads" feature, my next step is going to have to be posting a system-wide announcement telling instructors to make their students name their text files ".txt" and I'm dreading the fallout from faculty inevitably saying, "okay, they named their submission term-paper.docx.txt and now I can't open it..."
(All that said, I'm also concerned that this isn't really a problem of "text files not rendering properly if they don't end in .TXT" but instead an issue of "text files not rendering properly, period" and it's simply that the faculty with the strongest investment in that feature happen to be using it for text files that don't naturally save as *.txt?)