Windows Server 2012R2 64Bit,
Jenkins v1.646 (ran directly),
The build display name appears correctly in Jenkins (see 1.jpg and 2.jpg).
However we've noticed that some plugins do not use the correct value. In our case we noticed it with the email-ext plugin where the BUILD_DISPLAY_NAME variable was replaced with the standard BUILD_NUMBER.
When looking at the environment variables from that build, it is also not updated (as displayed in 3.jpg).
As far as I can tell the email-ext plugin relies on this environment variable (as may others). But it does not get updated as I would expect by the build-name-setter plugin.
This occured in freestyle jobs as well as in multibranch projects (through the multibranch plugin).