They can and do, but if the island doesn't have a rather significant bluff on it as the major feature/landmark it is kind of odd to name it after such a geographic feature, despite the dual meaning. It certainly has a great ring to it, but might not make the most sense if they don't plan to design it like Vulcano's sketches, though they'd be crazy not to.
That's why I suggested earlier that it might be worthwhile to submit all three variations and let Obsidian choose what they think fits best. Believers' End, Folly and Bluff all sound really nice. So I'll be happy with any of them.