With the Site Policies setting "Full Name Format" set to "First Name" students should only be able to see first names of other users, however teachers should be able to see full names because the teacher role allows this even though the site policy is set otherwise.
It is working for forums, assignments, etc, however it does not work for the Participant list and the gradebook. Teachers are only able to see student first names.
although if you sort by surname, the students relist as expected. Teacher just can't see the surname.