Why does suggested contact name appear blue in iMessage?

I agree with CAPTJON that the blue bolding is a bad choice on Apple's part. When Apple makes a choice for you, they'd better be right. Canceling predictive text whole hog is too broad a sweep. Please give us the ability to opt out just of blue-bolding Contact names.

Mention people in a group conversation

You can mention someone by name in a group conversation to call their attention to a specific message, and they’ll get a notification. Depending on their settings, the person you mention may be notified even if they have the conversation muted.

1. Open the Messages app  on your iPhone.
2. In a conversation, begin typing a contact’s name in the text field.
3. Tap the contact’s name when it appears.
4. You can also mention a contact in Messages by typing @ followed by the contact’s name.
5. To change how or when you get notifications when your name is mentioned in Messages, go to Settings  > Messages > Notify Me.

Good afternoon CAPTJON,

Welcome to the Apple Support Communities!

It sounds like you are using the predictive text feature when drafting a text in Messages on your iPhone. The resource below explains how the feature works. You have the option of ignoring predictive text and typing names completely as you have been, or turning off the feature completely.

Use predictive text on iPhone - iPhone User Guide

Enjoy your day!