In this case though I am extremely leaniant on game subs because the Japanese audio isn't what the sub is based on. I feel personally subs should be more accurate than dubs, and that subs should expect the viewer to understand a bit more about the culture of japan more than those who watch dubs. However I am in a very niche case where I understand Japanese fairly well. Honestly people who'd rather have more accurate dubs probably will default to watching it in it's original japanese as I do. However this is all just nitpicks from people who are more familiar with Japanese and it's culture and probably doesn't bother those who the localiztion are meant for, that being native english speakers with substantial knowledge on japanese socal customs. I personally find this a lot more annoying than Bell Pepper.
This is a byproduct of localization already changing it so they aren't using their family name at all as it's more natural for english speakers. I found a lot of times where Sumeragi is supposed to be stammering and calling people by their rank rather than names, or using their family name over their given it's simplified after the first act to just having him say their given name. On the other hand I find the english script to be less human than the Japanese voices and script are conveying. Honestly I find Bell Pepper to be less of an issue and more of an annoyance.
Which is why different things are localized differently and often times localisations can sometimes re contextualize or completely mitigate a plot thread that is "too japanese" for an english audience. Now the choices of what to localize is purely subjective. Localization should make the cultural differences less of a barrier for overseas players.
Honestly I agree that keeping the term Bell Pepper would have been more faithful and wouldn't have confused English speakers as much as more typical changes like characters referring to each other with their family names as well as honorifics and rank, even though it does lesson the fact that Sumeragi is clearly uncomfortable in the beginning with addressing his fellow OSF by their given names. I don't fully agree with his assessment either but calling his opinion xenophobic is a but harsh isn't it.