Here you need to make sure first you update the App displayName which you give for service principal and later update the service principal with the same displayName. Basically the servicePrinipal object validates its properties with the respective Application object. I have tested it in POSTMAN and found that it requires to update the display name on App object and later on Service Principal. Please check the below screenshots.
Update App object with new name PostmanGraphs
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Update Service Principal object with new name PostmanGraphs
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When an app object gets registered in AAD it creates a service principal automatically. See this document.
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