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system.tokens.inc implements [file:name] which overrides the existing file name. The description remains from the core token: "The name of the file on disk."
I doubt this module wants to replace this core token, even though the new value is arguably better it should probably use another token.
Discovered this while working on a patch which needs the File Entity name value (rather than the actual filename as it is on disk). So it works, but this should probably change unless there are motivations here I'm not seeing.