From my perspective, it appears that the root of the problem is "Microsoft Cloud". If you don't sync your email accounts with Microsoft Cloud, and instead sync directly with IMAP, you will be able to edit the first and last name of the "sender" of your email accounts. Just like we were able to do in the 90s.
Until Microsoft solves this problem (HELLO, MICROSOFT!), here is what did the trick for me, as a workaround:
- open desktop Outlook for Mac
- sign out of email accounts on that device only (so as not to disrupt accounts on your mobile version of Outlook (on the desktop version, go to Account settings > sign out (the "-" icon))
- after that, revert to legacy version of Outlook (Outlook > uncheck "New Outlook")
- when the old Outlook interface appears, sign out of email accounts again, if you have to, so that they no longer appear in the app
- quit Outlook & relaunch (it never hurts to reboot an app)
- add back the email accounts that you signed out previously (Account Settings > New Account)
- while doing this, don't worry about the content of the "Account Description" and "Full Name" fields (you'll deal with those later)
- once you have re-added all email accounts, go to Outlook > and check "New Outlook"
- a pop up appears regarding syncing to Microsoft Cloud
- in this pop up, click "Sync directly with IMAP" instead of clicking the "Continue" button
- with the "new" Outlook now open, re-input the "Account Description" and "Full Name" that you want for each email account (Account Settings)
- don't forget to add back/recreate the signatures that are no longer associated with your email accounts