Since Path of Exile was launched in Closed Beta back in 2011, around 50 million characters were created. That is a lot of unique character names that had to to be thought up on the spot. Of course, many of those characters would then be abandoned, as is usual with any online role-playing game. Those inactive characters occupy space in the server, along with their names that other players may want to claim but can't.
The thing is that Grinding Gear Games can't just delete those characters even after a very long period of inactivity since you'd never know if the owner of that account would log in again and play for even just a while. It would be sad for that person who decided to log into the game again for whatever reason and find out that his account has been wiped. There was some value to that account and the characters in it, and they're just gone even if that player had invested time on playing those characters, acquiring Path of Exile items, honing those skills and really exerting effort to avail of unique PoE items.
That's why they can't be deleted, and their names can't just be changed either. There's too much value in those character, as inactive as they may be. Also, an online role-playing game deleting characters is a big turn-off for gamers, no matter how good the game may be.
Whenever an MMO in beta wipes accounts for any reason, it's a downer for the players who have to work their way back to their previous standing.
This conundrum eventually makes an online role-playing game less hospitable from the get-go for new and returning players due to possibly not being able to get the name they want. They can put some numbers at the end of the name, but it's still not the same as the feeling of having something original that reflects your personality is a big part of the appeal of role-playing games in the first place. Therefore, something must be done somehow to alleviate this seemingly minor but practically major problem in Path of Exile.
Grinding Gear Games came up with a pretty ingenious solution to this character name problem. Instead of wiping old accounts or just ignoring the problem, they implemented a system for freeing up old character names. If someone making a new character takes a name of an old character that hasn't been logged in for more than a year, then the owner of that old character will be prompted to rename it in the next login (if ever). If the name is taken by a character that has been logged in within the year, then that name cannot be taken.
With this measure, Grinding Gear Games has pretty much solved the problem without having to delete characters altogether or just sitting on their hands on what to most developers and publishers may seem like a minor cosmetic problem. But then again, we're talking about a game that has ethical microtransactions of cosmetic enhancements, so of course they care about the look and feel of characters.
This new feature is to be implemented once the new expansion The Awakening goes live.