Username being used in Private Messages

I think I have found what is causing the issue.

I have changed my registration form to require a username (whereas before it was autogenerated). When emails are sent to notify users of new PMs they are greeted by realname which is excellent. The only time this does not occur is if two users have the same real name (with different usernames of course). If this happens then the real name is replaced by the username. The same happens when sending a PM: if there are two users with the same name but different usernames then the username is displayed instead of the real name but only in this scenario.

Does that help to determine the cause of the issue?

Quite interesting observation. Nevertheless uddeIM replaces the placeholder always using the realname or username depending on what is configured in the uddeIM backend. Maybe CB has a different mechanism and creates other messages but PMs and PM notifications created by uddeIM use the backend settings.