In my models I use the inline variable %Name% from feature class iterator.
It names the files, as seen in windows file explorer, correctly, like: SortedPollution- where Pollution is %Name%
In map view the files are displayed as the output of the model, like: Sorted%Name.
Odd error, I am sure it has a simple solution.
There is no such toggle, neither in the single layers properties, the properties of the map or in the tool.
As you can see in the attached image the filename is correct, but making displayname equal to filename doesn't seem straightforward.
All modeloutput is displayed like this, changing the filename from 'Sorted%Name' to '%Name%Sorted' doesn't change anything.
Adding the files from windows explorer displays the names correctly.
I received an answer on Stackexchange, and although I don't agree n the logic, the answer appears to be correct.