Deleting the Desktop.ini file from the root of the Profile on the User Store causes the folder to correctly appear as the username and not My Documents.
Solution 2: Configure the Desktop.ini file to automatically delete via Group Policy.
Go to:Group Policy -> User Configuration -> Preferences -> Windows Settings -> Ini Files
Create a new Ini File entry, with the following settings:
File Path: %userprofile%Documentsdesktop.ini
Section Name: .ShellClassInfo
Property Name: LocalizedResourceName
Ensure that you enable Run in logged-on user’s context under the Common tab.
This will remove the offending line from the user’s desktop.ini folder, fixing the folder display name behavior, and leaving everything else intact, including any other user-set folder view customizations, etc.