Manual:$wgIllegalFileChars

Details
This is a regex character class (i.e. a list of characters in a format suitable for a regular expression) that you want MediaWiki to convert to dashes ("-") despite being in the list of allowable title characters.

By default, file names can use the same characters as titles (see $wgLegalTitleChars), with the exception of those characters listed in this variable, the default being only the character ":". All other characters will automatically be converted to dashes ("-").

The default will not allow namespaces to be part of file names (example: File:Project:filename.txt). While this is generally desireable, it interferes with any extenstion that uses namespace indexing or protection. To keep the colon from being converted to a dash, you remove the  from this variable.