Reusing names of characters, locations, etc is allowed because they are not subject to copyright (only trademark, and in very specific cases). But it is bad on unfair to do so?
It depends. Names for people and locations get reused all the time, both in real life and in fiction and of course it’s fine to do so. At this point, it’s probably impossible to be 100% original all the time with the amount of books, games etc that are out there. However there are some names that are so iconic that people will immediately connect them with a certain work. For example I wouldn’t write a fantasy novel and name a city “Minas Tirith”, as everyone will just think of LOTR. But calling a city, say, “Dragonstone” is just fine IMO, even though it’s a place in ASOIAF (and probably more than a few older fantasy books).