It seems like you'd have to do something pretty stupid at the coding level to introduce a problem with "Null" by mistake. I'm sure it happens, but not more of an occasional issue.
My best guess is that there are common old databases that did not have a first class null type where it was common practice to use the string "NULL" for that purpose. And that companies that have these old systems are proactively filtering user input to prevent causing these old system to choke... It sounds like the filter is case-insensitive, though, which would be too aggressive for the case I'm thinking of. Maybe they are (mis)using a bad word filter for this, which would tend to be aggressive.