When you set the display name format in the User Account Settings on the Site Settings page, it is supposed to disable the ability of users to edit their display name. In 7.1, if you set the display name format, it will disable the ability for the user to save a new display name, but the UI still shows a text box which implies that the name could be changed.
1. Go to Manage Account on the User Profile screen when the display format is not defined.
2. Enter a custom display name.
3. Press update.
4. Go to Site Settings >> User Account Settings and define a display name format
5. Go to Manage Account on the User Profile screen.
6. Enter a custom display name
7. Press update
Once a custom display format is defined, then the display name in a user profile should be displayed using a label rather than a text box so that the user does not have the ability to change the name.
The user is shown a text box which implies that they could change the display name (although the back end won't actually save the changes). This could be confusing to a user who would not know why this field did not update correctly.