create a contact, display name "john doe", email "jond@doe.com"
then create a group "test"
make john doe a member of your group
try to write a mail using test group as mail recipient, you'll see "john doe"
now edit the contact, setting display as "Mr John Doe", save your editings
try to write a mail using test group as mail recipient, you'll still see "john doe"

it is reproducible with email addresses too

if you use the contact directly there's no problem at all