Building scenarios in e-learning: do you favor fictitious names in examples?

As usual, I agree with everything Judy said. 😆

I'll also add that it might be helpful to talk about all the other ways you are working to make sure that your scenarios are realistic and relatable. Point out how you are using realistic names (if not actual names of real people--and as Judy said, don't use obviously fake names). Note how the situations and choices are customized to your specific organization and your audience. Show how you are setting the context through images or internal jargon and language. All of those things do matter to learners, and they make it feel relevant rather than like generic training content that could have been built for any organization.

The problem of relevance that your SMEs are talking about is a real issue. In terms of persuading them, it might be easier to show that you're taking their concern seriously but that you're solving it in different ways than they suggested.