I still don't see how any system in the real world can safely assume its users only have names from that list.

Even if you try to imagine a system for a hospital to register newly born babies... What happens if a pregnant tourist is visiting?

For example in Iceland you don't have to name the baby immediately, and the registration times are different for foreign parents.https://www.skra.is/english/people/registration-of-children/...

Of course then you may fall foul of classic falsehood 40: People have names.

With plenty of attitude of course :)

I've only ever interacted with freeform textfields when inputting my name, so most regular systems clearly don't dare to attempt this.

But if somebody was dead set on only serving local customers or having only local personnel, I can definitely imagine someone being brave(?) enough.

The name a system knows you as doesn’t need to correspond to your legal name or what you are called by others.