No, the normalization cannot be performed by Wikidata. It has to be done against the home wiki, e.g. first normalize against the Wikipedia and then use it on Wikidata. We do not know, e.g. that the namespaces "Benutzerin" and "Benutzer" on de.wp are normalized appropriately, so Wikidata would either need to ask the other wiki itself, or the caller does it beforehand. The first solution provides a potential DOS attack vector, I guess, so we go for the latter.