**This appears to be caused by a combination of [Simple Parameterization][1] and [Dynamic Seek][2].**

SQL Server will, in some instances, parameterize a query that is not parameterized. But this can sometimes cause issues with implicit conversions.

What has happened here is that it has converted `N'Alex'` into `@1 nvarchar(4000) = 'Alex'`. Then it has transformed that `WHERE DisplayName <> @1` into a [Dynamic Seek][2]. The cardinality estimation may have been inaccurate due to your original query being `varchar` instead of `nvarchar`.

This can have some downsides, particularly in cardinality estimation, but it does have the benefit that the server can seek both ways from a inequality predicate.

In other words,
```
WHERE DisplayName <> @1
```
becomes two seeks with the logic of:
```
WHERE DisplayName < @1 OR DisplayName > @1
```
___
The `Sort` and `Merge Interval` are not actually required here, because the two predicates must by definition be disjoint, but that is the standard Dynamic Seek setup.


  [1]: https://sqlperformance.com/2022/03/sql-performance/simple-param-trivial-plans-1
  [2]: https://www.sql.kiwi/2012/01/dynamic-seeks-and-hidden-implicit-conversions.html