Let me explain,
Our ship doesn't support Unicode (2 byte characters) yet, your name is in JP (2 byte characters), it will make 0's the second byte of each character.
So lets say as an example your name in binary is 33 34 35 36 37 38 (3 character, 2 bytes each)
Of the stuff explained above it will be 33 00 35 00 37 00 (3 characters still 2 bytes but second byte "deleted")
And then your name won't match, depending on the original characters you will see random stuff like !@#$%^&*( or just non-printable-characters which as it says wont appear on the screen/banner/text
PSO by default supports Unicode, it's a jp game, but remember we are not using the original server as it's most likely lost forever, updating all the text functions and the program itself for Unicode is quite a big task that is already done by the original developer, so we are just waiting on the release of the new version of the server
If now you are confused of how you can have the name but the banners don't work with jp, is because the ship doesn't do anything with your name, only with the banners.