Why do some communities have @[INSTANCE NAME] and some are just their names?

Haggunenons@lemmy.world to Lemmy@lemmy.ml – 6 points –
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They’ve set a separate display name that’s show instead of the name that also appears in the URL.

Can community display names be reused then, multiple communities choose to have the same display name?

Is this the case with users too, anyone can set their display name to anything?

Yes and yes.

You can have multiple communities with the same name in different instances, and not necessarily about the same subject.

You can also have not only the same display name as multiple other users, but even the same username, if not in the same instance.