Perhaps I phrased myself poorly. The "in case of typo" renames are not in case the staff has made a typo in the renaming process, but in case the user has made a typo when registering their account, particularly as creating a new personal journal for free costs an invite code, and buying paid time to get a new journal means you wouldn't want to be stuck with a typo.

Judging from the number of public support requests on LiveJournal asking for help in how to rename, and the number of people on my friends list who have renamed, I would say that it is reasonably popular. At least one person of my acquaintance is on at least her third rename, if not more.