Why DB2 cannot allow creation of database with keyword "BACKUP" in its name?
There's no restriction on the specific name, other than it must be 8 characters or less.  So BACKUP works just fine as a database name:

$ db2level
DB21085I  This instance or install (instance name, where applicable: 
"db2inst1") uses "64" bits and DB2 code release "SQL10055" with level 
identifier "0606010E".
Informational tokens are "DB2 v10.5.0.5", "s141128", "IP23633", and Fix Pack 
"5".
Product is installed at "/opt/ibm/db2/V10.5.5".

$ db2 "create database backup"
DB20000I  The CREATE DATABASE command completed successfully.