It’s because pronounciation and grammar. In polish C is always something like english TS, so there is only one K. And in polish pronouncing KaRL, that RL part is hard, so O appeared (the same happened in all other slavic, ugric and romance languages). The source for name is the same old germanic “Karl” for “man, warrior”.

The same btw happened to english, but only feminine version was softened like that, thus Carol.