It is because terms.slug and terms.name are both unique indexes with the MySQL table structure.
Unique Packed Column Cardinality Collation
PRIMARY BTREE Yes No term_id 13 A
slug BTREE Yes No slug 13 A
name BTREE No No name 13 A
WordPress uses canonical redirects which mainly rely on a viable single posts.post_name or terms.slug query result. Having multiple entries for the same post_name or slug completely removes the reliability of canonical redirects, thus unique indexes are defined in these tables.
The reason a term name is unique is because it is typically the source of the slug when a user creates a new category or tag. Also, menus term slugs are generated from the term name. If two names match, then the slug would not be unique.
Though I wouldn’t recommend it, you can manually go into term_taxonomy and associate term_id with a different term if you need a pseudo ‘duplicate’. I can’t speak to the implications of this on your site, but it technically would work to subvert this structural dictation.
A wise man once told me, don’t burn a bridge without asking first why it was built. This is a good application. Don’t start creating pseudo duplicates without understanding why the table indexes are unique in the first place.
Canonical redirects have been in place since 2.3. Check out Mark Jaquith’s post here for a more in-depth explanation.
You can use the following to disable canonical redirects:
remove_filter('template_redirect', 'redirect_canonical');
Hope this helps clarify the issue a bit.