Can the sub-account name be displayed as the recipient name to the user?

Yes, this is fully supported.

You can set a custom sub-account name, and Ivy will display that name as the recipient to the end user during the payment flow. This is done by creating a sub-account with the desired display name.

You can find the API details here:
👉 https://docs.getivy.de/api-reference/subaccount/create-a-subaccount#create-a-subaccount