Agreed. If "Connected Persons" in the UK tax law was intended to govern the contract's interpretation, that would have been explicitly called out in the contract. (Note: in the U.S., M&A law is part of tax law, but even in this context it is understood that a term has its common/dictionary meaning unless the language of the agreement specifically states that a statutory or regulatory meaning is intended.)

But also, capitalization isn't generally relevant for determining whether a noun refers to a defined term or not; for example "Connected Persons" "connected persons" and "CONNECTED PERSONS" are all read the same, unless there is something in the contract that specifically states otherwise. It used to be common for the first usage of a defined term to be all caps.

This story reads like someone thought they could save money by not having a (subject-matter competent) lawyer review everything and it came back to bite them in the ass.