I own a full region and a homestead here in SL, I would like to clarify the issue on sim names. While it is true that upon purchase of a sim you have to name said sim and that name cannot be changed unless the sim owner pays to have it changed (There is a US$50 charge to rename a Private Region.)
However, I will add something that is more important, a sim basically has 2 names, one which is given to LL at time of purchase, and is the name which the land is billed under, and is the one which cannot be changed without paying the above mentioned fee. The second name is VERY EASILY changed under the "About Land" options, and is also the predominate name that will show up in searches and so on.
For example: My sim was named SWRP upon purchase. When searched, it can be found under that name in the secondary position. The advertised name of the sim is (Unofficial) Secret World Roleplay, and is the predominate name for the sim.
So in short, it is NOT necessarily something that LL has turned a blind eye to, in fact it is highly doubtful that is the case. More likely, some individual went into the about land options and changed the advertised name. In which case, they should be AR'd (Found under "help" in your viewer as "Report Abuse") and it will probably take some time, but I am sure it will get looked into. *I suggest you file the report from that sim, for proof and details for LL to more easily look into.
(Hope this information helps)