Como comparo a entrada do usuário a uma string de letras maiúsculas em uma lista?

Conforme os comentários mandam vocês podem usar char.lower()mas vi algumas outras coisas que podem te ajudar então aqui vão mais algumas dicas e petiscos.

Primeiro, você pode criar suas listas usando a compreensão de lista, pois é mais curta e bastante fácil de ler.

import random

WORDS_LIST = ["I do not know"]

# A list of characters
answer = list(random.choice(WORDS_LIST))

# A set of all the letters (converted to lowercase) that are contained 
# in the answer. sets are significantly faster to search through.
letters = {char.lower() for char in answer if char.isalpha()}
guessed_letters = set()

# Note the syntax used above and here. This is called list
# comprehension.
# This is the same as:
# guess_box = []
# for char in answer:
#     if char.isalpha():
#         guess_box.append("_")
#     else:
#         guess_box.append(char) # Just use the space.
guess_box = ["_" if char.isalpha() else char for char in answer]

Então você pode lidar com sua lógica de entrada:

print(' '.join(guess_box))
player_choice = input("\nguess a letter: ")

while player_choice:
    print(f"You chose: {player_choice}")
    # Convert user input to lower case
    player_choice = player_choice.lower()
    # If this letter was guessed before:
    if player_choice in guessed_letters:
        print("You guessed this letter already.")
    else:
        guessed_letters.add(player_choice)

        # Check if this choice is in our word
        if player_choice in letters:
            # If we have this letter then change
            # the guess_box
            for index, val in enumerate(answer):
                # Of the user input
                if val.lower() == player_choice:
                    guess_box[index] = val
        else: # The letter is wrong
            print("That letter didn't fit")

    print(' '.join(guess_box))
    player_choice = input("\nguess a letter: ")