Note that hostname used there is from a host which was used to add very first item entry to the graph.
When editing the graph, even if you change sorting of items in the graph - host name in the caption will stay the same.
I believe we already have a ZBXNEXT issue about configurable graph caption.
Hmm, I can't find a similar ZBXNEXT
ZBXNEXT-535 asks for additional caption in screens
ZBXNEXT-1813 asks for "Visible graph name". But again for screens.
Another way could be to provide an option to define a custom label.
this is a very old problem, and i was sure there would be an older zbx... but i could not find one 
the solution is simple - if there are items from more than one host, host name should not be included.
I had spent a lot time to find the mentioned duplicate too - without success.
Possibly it's the right time to think about reverting/updating the Zabbix ID accordently.
Let's fix it the way Rich suggested, just omit the name if the graph contains items from more than one host.
FIXED IN svn://svn.zabbix.com/branches/dev/ZBX-6675 r43874
(1) No translatable strings changed.
Eduards CLOSED
(2) Small improvement:
foreach ($dbGraph['hosts'] as $gItemHost) {
if ($hostName === $gItemHost['name']) {
$hostName = '';
break;
}
else {
$hostName = $gItemHost['name'];
}
}
oleg.egorov FIXED IN r44031, r44040
Eduards CLOSED
(3) Also addition code formatting is require as discussed
oleg.egorov FIXED IN r44031, r44040
Eduards CLOSED
Tested
FIXED IN 2.3.0(trunk) r44047
CLOSED