Is there a server that does this at the moment that can be used to test clients?

soju does this, but there's no public test instance. FWIW, the clients I've tried are: gamja, weechat, revolution irc, senpai (user reported a bug, now fixed). I haven't received other bug reports from chat.sr.ht users about this.

I imagine it's quite a rare real world situation tbh, and may not manifest in an immediately obvious bug. I'll have a play with a dummy netcat server.

Confirmed that IRCCloud handles this as well.

Any objections against landing this?

Would prefer to see some tests with other clients, but I'm fine with it.

Any updates on this? InspIRCd currently sends CAP DEL then CAP NEW but I can easily update it to just send CAP NEW if this is merged.

Someone just needs to test other clients.