We can use  powershell command to change sharepoint user display name.   Set-SPuser -identity “User name” -DisplayName “Display Name” -web Web url  

Eg: Set-SPuser -identity “i:0#.f|fwamembershipprovider|kdc1” -DisplayName “kdc1” -web http://xyz:117/

In case you get access denied while changing the display name, run powershell as administrator/Farm admin.

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