I understand where you are coming from, but I my irritation comes from the fact that they device cannot be revoked from my account and recycle the name. (e.g. OS reinstalls, etc. I don't really like naming my device MyMainPhone-2, logically because it's not my second phone. It's a same device to me.) If the device that's active already have that name, I would agree with your decision that duplication is not allowed.

Maybe some people are more irritated by that than others (I'm certainly former-type), perhaps consider "advanced" to remove existing names for those who knows what they are doing?