[pedant mode]
I would actually argue that either way is correct. The plural possessive is correct for obvious reasons, but I think using the singular possessive could also be construed as correct, if you think of using it in the same way as you would use the word ``each''. Change it to ``Honoring each's use of capitalization'' and you'll see what I mean. But since this falls under the auspices of context, and since context can't really be provided in a title, this argument is a little shaky, but I don't think that the usage is outright wrong.
[/pedant mode]