You have done all below necessary checks, but the problem is not resolved.
- Active Directory (Azure AD in case of Office 365/Microsoft 365) reflects the name correctly
- Outlook reflects the name correctly
- SharePoint User Profile Service reflects the name correctly
- Deleted the user from SharePoint site and reassigned permissions, that does not help either
- Clearing cache does not help and still old name displayed
- Trying from different browser, machine does not help
You will come across multiple solutions like changing the name using PowerShell / Management Shell, deleting the User profile and recreating, etc. But this solution will work in most cases, so try this out first.
Solution -Try adding the user again or just try checking the SharePoint (site/list) permissions, if you see the name resolving correctly in the people picker but displays old name after adding, then follow below steps to resolve.
Important- All users having permissions to a SharePoint Site Collection are added to a hidden list which cannot be accessed directly from site contents. SharePoint automatically makes an entry here when users are granted access or they login.
You need to access this list to fix the problem. There are 3 ways to see the users.
- [SiteURL]/_layouts/15/people.aspx?MembershipGroupId=0 (update the _layouts link based on the SharePoint version in use)
Make a note of user permissions before performing these steps. You may have to add the user back to Site Collection, sub sites, lists and libraries if they have unique permissions.
- Use the MembershipGroupId=0 approach and navigate to the "All People" group
- Locate the user and you should see the old name being saved
- Delete the user entry and re-add
- Check the user display name now, it should show the correct name
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