Canvas, and many other systems on campus, uses your preferred name. This is set in MyUW.
The Preferred Name policy contains the standards followed for preferred names at the University of Wisconsin-Madison. All NetID holders may designate a preferred name, which is used by most university systems.
Using a preferred name is entirely optional. However, if you designate a preferred name in My UW, that is the name will appear in Canvas. If you don't designate a preferred name, your legal name will appear in Canvas.
To enter or change a preferred name, see Preferred Name - Service Description.
Canvas users are unable to change their display name from directly within Canvas. Instead, if you wish to change your display name, you'll need to access My UW and modify your personal information.