Welcome to Legal Jargon, where everything is broad just in case.
They have to have the names thing in their TOS for a few reasons, but the famous people and famous characters is on the off chance a celebrity or copywrite holder of that media (Harry Potter as your example), gets offended and decides to sue. The latter especially, since copywrite is also super broad and ZOS would have to prove that they're not making income off of said copywritten content. Typically TOS are made in a way that leaves the specific nitty gritty details up to the lawyers who would handle it should a case be brought forward, so they can be a bit convoluted and confusing.
Some things can get away with it, South Park as an example, because it's considered a transformative work of fiction. ESO isn't, so they don't have the same protections from real life people or copywritten material the same way a cartoon studio does. There's a reason, too, where movies at the end-credits include a "any resemblance or likeness to a celebrity is all coincidence" thing at the end of their content, because defamation lawsuits (specifically verbal slander or written libel) is something you can sue someone for if it's considered bad enough that it tarnishes or ruins someone's reputation.
The offensive names is similar but it's more to state they don't tolerate racism, homophobia, or other offensive things being used as ways to harass or intentionally cause harm to other players. It's generally a good policy to have, and also, lessens any potential "you allowed targeted harassment to exist on your platform and ignored it" cases coming forward. It serves also as protection to state "You knew this was against the rules and did it anyway" if they ban someone for it, without them being able to claim they had no idea in return. In a climate where people spend hundreds of dollars on a shiny box to get a shiny horse, you have to make sure said people wouldn't also turn around and slam ZOS under a bus if they were banned for their behavior.
Note, I'm not a lawyer! I've seen this come up in fanfiction communities and artist communities who have to craft their own TOS to not get them sued by a big company (Disney for example) for writing a story or drawing a picture of their characters or a celebrity.
Very informativ, but one question.
So what if my name happens to be a serial killers name and I didn't know about it? I mean they have to allow a name change I guess? I'm no historian and I don't know everything, I also don't know if a harmless word in my language might be an offensive word in another language.
I'm pretty sure I could log in right now and wander around for 20 minutes and guarantee I can find a lot of names violating Tos.
ZoS would not have anyone left to play the game if they banned instead of allowing people to change names.
Very informativ, but one question.
So what if my name happens to be a serial killers name and I didn't know about it? I mean they have to allow a name change I guess? I'm no historian and I don't know everything, I also don't know if a harmless word in my language might be an offensive word in another language.
I'm pretty sure I could log in right now and wander around for 20 minutes and guarantee I can find a lot of names violating Tos.
ZoS would not have anyone left to play the game if they banned instead of allowing people to change names.
Well! That would be where your own lawyers come in and make that argument for you. Technically, if it was your actual legal name and you could prove it, they couldn't do anything here. I think the same would also apply for non-English words as well, but I'm also not entirely certain to be honest. I know the last time I discussed it with some friends who are building a streaming app, they left TOS as "the lawyers know how to do this" lol
That's true, people still use them. I know you're encouraged to report them but I never hear of anyone doing that.