New York's R train has a 23rd St in Manhattan and a 25th St in Brooklyn; its B train has two Seventh Avenue stops; and Chicago's 'L' has 5 stations named Western (with two being on the Blue line). People can figure it out. It's obvious that Islington station on the Bloor line is at Islington and Bloor, while an Islington station on the Eglinton line is at Islington and Eglinton.
The issue with using neighborhoods for wayfinding is that it's non-specific and pretty subjective. Forest Hill can mean anywhere from Marlee to Avenue (depending who you're asking). When I have to go somewhere, almost never do I think I have to go to "Fairbank" -- I have to go to Dufferin and Eglinton. The latter being far more specific about where I need to go. It doesn't matter if I'm driving, on the bus, or on foot -- if I look for Dufferin, I know I'm on the right track. "Fairbank" only helps if I happen to know the area already, whereas Dufferin I'm going to encounter just by naturally going through the city.
At its worst, this results in things like things like Pioneer Village being 1km from it namesake, and the future Flemingdon Park station being closer to the Science Centre than its namesake (if the Science Centre doesn't move altogether)
There's also two Kennedy and Steeles intersections in the GTA and nobody seems to be very bothered about it.