I have a user who was originally imported from AD with the first name Judith. She actually goes by Judy. When people mention her in their my sites newsfeed, they have to remember to type 'judi' instead of 'judy'. I changed her display name and first name both in the SP profile and in AD. But it hasn't updated how a user mentions the person. Will the name in mentions always be the original canonical name from AD or is there another way to update it? The user's profile correctly shows the update, it is just that when it is in mentions, it doesn't use the updated name.
Try Removing her from the hidden user list
Then when she logs in again, it should re-add her to this list. You can then confirm the name has been updated