It doesn't do anything until you start the game and go to the ship design window. There, in the names field, there is a downwards pointing arrow. Clicking on it will bring up a scrolling list of names that you can select for the ship. The names in this list are determined by which file that you selected when you created your empire. If you want to look at the design names files beforehand, (warning, technical mumbo-jumbo coming up
) they are located in the Dsgnname folder located in the folder where you installed SE4. Each text (.txt) file in there is one of the name Groups that you can select to use in the game. You can put more files in there (and even make one of your own), and they will be available when you create an empire. It does not matter if other people in the game have the names file that you use, because it is only accessed when you go to design a ship.