Why doesn't this wildcard work the way I expect?

According to bash man page:

bash scans each word for the characters *, ?, and [. If one of these characters appears, then the word is regarded as a pattern, and replaced with an alphabetically sorted list of file names matching the pattern

and from info node for ls

The `ls' program lists information about files (of any type, including directories). Options and file arguments can be intermixed arbitrarily, as usual.

For non-option command-line arguments that are directories, by default 'ls' lists the contents of directories, not recursively, and omitting files with names beginning with '.'. For other non-option arguments, by default `ls' lists just the file name. If no non-option arguments are specified, 'ls' lists the contents of the current directory.

so when yo give ls d*, d* is expanded to sorted list of all file/directory names starting with d. So you command becomes

ls dump

and as dump is a directory name so you get the listing of all files in the directory "dump' but when you give ls D*, D* is expanded to "Desktop Documents Downloads Dropbox", so the command becomes

ls Desktop Documents Downloads Dropbox

and as all of these are directories, you get the listing of files in individual directory. If there was a file starting with D in current directory it would have been listed seperately.

ls d* and D* both list files and folders matching d* and D* respectively, the behaviour is the same, there must have been a mistake on your test.

If you want to list only the folder names and not the folder contents you need to use "-d":

ls -d D*