A colleague is showing as Unknown User in Microsoft Teams rather than using their name

Sign out of Teams (your picture top right > Sign out) and sign in again.
In Teams Chats, remove and re-add:
1. Hover over your chat with the person that's showing as Unknown User
2. Select the 3 dots (...)
3. Select Remove chat history
4. Create a new chat and choose that person
If the above doesn't work, next clear the Teams app cache:
1. Open the Windows ⚙️Settings app
2. Select Apps > Installed apps > Microsoft Teams > 3 dots on right (...) > Advanced Options > scroll down and select Reset
3. When you next open the Teams app it should download the correct data for the user

Restore the name by re-syncing Teams to the server