Oh, so you can't change their Display Name because they have no member record. Interesting situation.
However, I don't know if the masking rule for message bodies should generally be applied to Display Names in "normal" groups. I think that in "normal" groups you'd want some sort of comprehensible, complete Display Name in all cases, but if the email address is wiped out because of a masking rule, you'd have nothing. You could go in and change it in a "normal" group, but that might require some detective work in some cases. Imagine a message showing up as being by "Suzanne@..." and your group has 10 Suzannes (which is actually the case in my group:). You'd have to go into email to decipher who it was actually from.
Or I'm misunderstanding the suggestion.
Messages are the sole opinion of the author, especially the fishy ones.