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I think it's because non-english speakers would have a harder time differenciating the song titles on an album's track list. Lots of japanese singers do this, not just ayu. From Rebecca & Hamada Mari to BoA and day after tomorrow, almost everyone in jpop does this. If you're looking for certain capitalization as WELL as letters, it's easier to find a song you're looking for on a tracklist. Like it's easier for mostly-english-speakers to find a song title if we already know it's all katakana, or all kanji, or a certain number of characters.
As for how they're decided, i think it's pretty arbitrary really. Whatever aesthetically looks better, not necessarily how the lyrics are in ayu's mind.
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