It seems that when adding fields from a different entity than the record you are on (Such as company onto a division record) into the layout, it will automatically concatenate the entity name to the field name, so it will show as {Entity}.{FieldName}.
This can appear messy, and there is no way to remove the prefixed entity name. I believe there are use cases for when you might want to show the entity name, so I think the ideal solution is a toggle to show or hide the entity name on the fields.
This would work similarly when adding a field in a report, as there is a toggle to show entity name. This will allow you better control of how these field labels are displayed.
