Yes, I agree. But it isn't really you who chooses which army you're in (unless you're a region lord). And nowadays, you still see knights who don't use the informal army banner, and I'm not sure they do it just because it looks ugly on the unit name. Though I have to say it's rare to see conflict between knights and armies in this level.
The so-called "informal army banner" is an abomination. Tom is, and always has been, adamantly against its use anywhere in the game.
Your unit name is a name. It is not a banner. It is not a handle. It is not a place for hanging clan tags.
One of the reasons we wanted to implement these army banners was to eradicate that utterly atmosphere-breaking practice altogether.