I've recently noticed an answer where a line was represented by a capital letter (not anymore, it's been edited).
Can straight lines be represented by capital letters given that the letters are initially defined?
Are there any cases when denoting an object by some unusual symbol is considered wrong?
Could I define two points as, e.g., $\beta$ and $\zeta$, and the segment that they create as $\zeta\beta$? Could that be legitimately marked wrong on a serious exam?
And can $AB$ (where $A$ and $B$ are points) be considered a straight line instead of just a segment? A straight line is defined by two points, so that notation sounds correct to me. Is it?
Update:
I've seen this written on an exam: "Two parallel lines $a$ and $b$ are intersected by the line $AB$." The point $A$ was on the line $a$ and the point $B$ was on the line $b$ (on an added diagram). Is this wrong?
In a high school geometry course, it is common to always denote lines by pairs of capital letters which represent points, i.e. $AB$ or $\overline{AB}$ (often these two are distinguished).
In practice, this notation is extremely unstandardized and the exact form you use is widely considered irrelevant. In a classroom setting, of course, you get points based largely on how your grader feels about the correctness of your work, and so if E asks for a specific notation, you would do best to give it to em.
To answer your questions directly:
"below":
In Euclidean geometry, the observation that a straight line is defined by two points is almost true, but the only thing truly defined by two points is a pair of points. What is true is that a line is defined by two points and the assumption that the object you are considering is a line. This is what the fuss about $AB$ or $\overline{AB}$ or $m(AB)$ or arrows or half-arrows is really about; the notation is trying to convey not only the two points, but also what kind of object is being considered. In practice, you can just say "The line $AB$", where $A$ and $B$ were previously understood to be points, and you are perfectly understandable.