A clarification has been issued by AFS-720 to help DPEs who encounter mismatches in middle name and middle initials when processing pilot certificates. The following note may be of help to some examiners when a discrepancy is encountered:
AFS-720 now says about middle names.
The applicant shall use their full legal name. If the applicant used their middle initial on their student pilot certificate, it is okay to use full legal name on their application and private pilot certificate. It is not considered a name change anymore. As long as they have documentation to show full legal name.