I think they take Fame into account. Kings may be automatically known, as well as the ruler of the Settlement you came to life in. That being said you may not get the nameplate for a Duke because even though they are well known you have never met them.
Let's say the King wanted to go for a walk. They could put their hood up and walk through town without their name automatically popping up for everyone to see.
Also, I am not sure about the distance you need to be to see the nameplates pop up.
Let's say a group of thieves put together a large group and ride into a town flying a Duke's banners, well dressed, and act like they own the place. I wouldn't want the nameplates to automatically appear. Would you actually know they are who they say they are? I would rather the game not decide that for me.