Renaming a custom object does not reflect the correct name in related object picklist
A custom object has been renamed, and now the name change is not reflected in lookup relationships visible from the Related Objects picklist in the Merge Field Generator and is causing inconsistencies in naming.
Example: The object Project 1 was renamed to Project 2. However, the related object is still using the old naming convention within the Related Objects picklist: Projects_1__r.
In Setup > Object Manager, you can edit the lookup relationship on that object and update the Child Relationship Name to the correct name.
In the example above, if the Project 2 object has a lookup to the Account object, you will need to update the Child Relationship name from Projects_1 to Projects_2 to keep naming consistent.
Note: Updating the Child Relationship Name will also require you to reformat your merge fields in any already existing templates to match the same name.