I think it results in a lot of confusion within the organization and additional onboarding friction for new hires.
On the flip side, I acknowledge that it can be a morale booster and gives teams a way to express themselves.
Is there a way to meet in the middle here, or do you just have to weigh the pros and cons and choose fun vs. functional team names?
Maybe just have two titles for them? The functional description and a colloquial team name?