If you set a players custom name (ie. through nbt editing) or change their custom name by code. Their name will not update, and still show their login name.
Forcefully making them display another name also maxes it to 16 characters, even though other entities can have a name up to 64 characters.
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Comments 4
Yes, it was hardcoded to 16 characters because that was the max playername you could get for a minecraft account, however with the custom names that limit was extended to 64 characters for custom names on anything other then players.
Is this still a concern in the current Minecraft version 1.7.2 / Launcher version 1.3.4 ? If so, please update the affected versions in order to best aid Mojang ensuring bugs are still valid in the latest releases/pre-releases.
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Afaik player names are hard-coded limited to 16 characters.