The Office 365 User Name Change screen allows administrators to change the first name, last name, display name, and user name attributes of their Office 365 users.
This functionality is especially useful if the Directory Synchronization is enabled on the domain, or AD FS is enabled, as changing the user name on Directory Synchronized or Federated Users typically requires Powershell commands to be run.
If the user is not synchronized, changing the Office 365 User Name will also change the primary SMTP address and SIP address, if Lync is enabled on the account.
If the user account is synchronized via Directory Sync, you will have to update the email and SIP attributes in the local Active Directory after the account has been renamed. You will also be required to update the First name, Last name, and Display Name in the local Active Directory.
Troubleshooting Renaming Federated Accounts
The process that 365 Command performs to rename federated accounts is described in this support article:
Changes are not synchronized to Office 365 after you update the UPN of an on-premises user account to use a different SSO-enabled domain suffix
When renaming the federated accounts 365 Command first renames the account to the onmicrosoft.com domain and then the final domain. It is possible that during this process the account could become stuck in the onmicrosoft.com domain. While 365 Command always attempts to rollback failed renames, there are times where even the rollback fails, due to inconsistencies with the PowerShell commands being executed. If this does happen, the article above should be followed to rollback the user account to the original name or forward to the new name.