One of the advantages of this system is that an outcast or a wanted PC (Evil Mc Evilface) can't interact with the PC that sells trade licences, so they can't get a trade license, as he shouldn't. But now some other char could go to the NPC and tell him his name is Evil McEvilface and then hand the license to the PC that needs it.
On the other hand, this could actually happen IC. Barovia is a medieval country and impersonating someone for a document seems doable. It's not like they had biometrics back in the day.
It's a can o' worms. I've never liked the trade licenses anyway because it doesn't make sense to me that you have a Market District within Vallaki proper with stalls and shops run by Vallaki citizens, and yet the local government supports a system to drive commerce to the Outskirts. The point of a guild/license system is going to be to discourage competition, as well as provide tax revenue. For a modern example, see the Chicago taxi medallion versus Uber:http://www.chicagotribune.com/business/sns-201509221800--tms--savagectnts-a20150922-20150922-column.html
Trade in the Outskirts should be more that merchants must hazard the night (when garda aren't around), or that garda just come through and demand bribes every now and then to look the other way. Or the merchants get driven off when more scrupulous garda come through. This should be especially true for Outlander merchants and doubly true for Outlanders selling anything suspect.
The license was supposed to promote more RP (the above seems like RP to me). Instead, I usually see merchants putting their license on the ground by their stall so that garda don't question them.
Going to your point, yes, the entire identification part based on name doesn't really fit with the setting when positive ID was very difficult to prove. Think of Martin Guerre
or even more famously, Jesus. Why was it necessary for Judas to kiss Jesus? Because at night he and his disciples (presumably) looked a lot alike, even to people who saw him "preaching daily in the Temple." Later, we also have the example of Peter warming himself by the fire and denying that he is Peter to the woman who identifies him.
Barovia is a place in which visibility is often reduced. At night there's no electrical lighting or streetlights. Try walking around your house by candlelight sometime!
IMO you'd have lots of cases of mistaken identity, and the burden of proof would be on the person identified to prove they were not who others claimed they were. (Another example, albeit fictional: in Les Miserables
the man who is almost convicted of being Jean Valjean until the real Jean Valjean comes forward. Yet Jean Valjean is able to become mayor and pass unrecognized even to Javert by dressing differently and taking a good bath.)
The text name floating over your head seems to me to be a game mechanic for simplicity. Although it's true many people want the realism of "you don't know my name until I tell you" (never mind that someone else may have identified you to me and you don't realize that), does anyone RP the same with NPCs? Or do you use this meta information to know which foes in a group to target as priorities and how? Do you use the information in tracking Port bounties, for example?
IMO if you don't want people "recognizing" you, wear a hood and put it in your Examine text as signals. Otherwise, if my PC doesn't know you, I will RP that, but I really don't understand those who take on names different from their floaty text and expect everyone to remember that about their character.
You picked your name when you created the character. Why didn't you pick the one you want to go by?
Okay, you're in disguise now, but as the discussion above should evidence, the name isn't what gives you away! Changing your name isn't a disguise. Even today, how many terrorists have similar names? Is that how they're tracked and caught, or is it how they look?
I think it's the responsibility of those who assume different identities to communicate that they are in disguise by wearing hoods and/or changing their description, rather than getting upset that other PCs can't guess that and react to the very obvious floaty text instead. At least until some mechanical means is implemented (such as setting the text a certain color like light gray when incognito?).