Yes, case insensitivity can be enabled and disabled at will in Java regex.
It looks like you want something like this:
System.out.println(
"Have a meRry MErrY Christmas ho Ho hO"
.replaceAll("(?i)\\b(\\w+)(\\s+\\1)+\\b", "$1")
);
// Have a meRry Christmas ho
Note that the embedded Pattern.CASE_INSENSITIVE flag is (?i) not \?i. Note also that one superfluous \b has been removed from the pattern.
The (?i) is placed at the beginning of the pattern to enable case-insensitivity. In this particular case, it is not overridden later in the pattern, so in effect the whole pattern is case-insensitive.
It is worth noting that in fact you can limit case-insensitivity to only parts of the whole pattern. Thus, the question of where to put it really depends on the specification (although for this particular problem it doesn't matter since \w is case-insensitive.
To demonstrate, here's a similar example of collapsing runs of letters like "AaAaaA" to just "A".
System.out.println(
"AaAaaA eeEeeE IiiIi OoooOo uuUuUuu"
.replaceAll("(?i)\\b([A-Z])\\1+\\b", "$1")
); // A e I O u
Now suppose that we specify that the run should only be collapsed only if it starts with an uppercase letter. Then we must put the (?i) in the appropriate place:
System.out.println(
"AaAaaA eeEeeE IiiIi OoooOo uuUuUuu"
.replaceAll("\\b([A-Z])(?i)\\1+\\b", "$1")
); // A eeEeeE I O uuUuUuu
More generally, you can enable and disable any flag within the pattern as you wish.
java.util.regex.Pattern/regex/i (Pattern.CASE_INSENSITIVE in Java), you can do /(?i)regex//first(?i)second(?-i)third//first(?i:second)third/\b between a \w and a \s)