Does your policy log provide any error details?

Couple of things. First, if you could please edit your post to include the script tags around your script so it formats correctly, that would help some. Highlight the whole script, then click the button in the post edit toolbar that look like >_

Second, check your policy settings to ensure its not set to run Once per computer as the frequency. With that setting, even if a Mac falls into a Smart Group for example, the policy won't run again if it already ran once. Make sure its set to Ongoing frequency if you want it to continuously fix the naming convention as machines land into the group.

@easyedc I checked my policy logs and there are no errors listed for the rename policy.

@mm2270 I have copied the script below. I verified the execution frequency is set to ongoing.

#!/bin/sh

# ensure this is run as root
if 
    [ `whoami` != root ]
then
    echo Please run this script as root or using sudo
    exit
fi

# check of computer is already bound to domain
domain=".k12" 
current=$( dsconfigad -show | awk '/Active Directory Domain/{print $NF}' )

if [[ "${domain}" == "${current}" ]]; then
    echo Computer already bound to AD
    exit
fi


# Set a variable with the last 7 digits of SN
L7SN=`/usr/sbin/system_profiler SPHardwareDataType | awk '/Serial/ { print $NF }' | tail -c 9`

# Is this a portable? 0 = no, 1 = yes
BOOK=`/usr/sbin/system_profiler SPHardwareDataType | awk '/Model Name/' | grep Book | wc -l`

# Set system name variable based on the above two variables
if [ $BOOK == 1 ]
then
     NAME=7366STL$L7SN
else
     NAME=7366STD$L7SN
fi
# Set Computer name based on Variable
/usr/sbin/scutil --set ComputerName $NAME
/usr/sbin/scutil --set HostName $NAME
/usr/sbin/scutil --set LocalHostName $NAME

So what happens if you just run this script locally without JAMF involved? When get it (running on a VM) I get a clean output.

Last login: Tue Nov 22 15:38:26 on console
Administrators-Mac:~ admin$ sudo -i

WARNING: Improper use of the sudo command could lead to data loss
or the deletion of important system files. Please double-check your
typing when using sudo. Type "man sudo" for more information.

To proceed, enter your password, or type Ctrl-C to abort.

Password:
Administrators-Mac:~ root# sh -x /Users/admin/Desktop/name.sh 
++ whoami
+ '[' root '!=' root ']'
++ /usr/sbin/system_profiler SPHardwareDataType
++ awk '/Serial/ { print $NF }'
++ tail -c 9
+ L7SN=JxfkpsAF
++ /usr/sbin/system_profiler SPHardwareDataType
++ awk '/Model Name/'
++ grep Book
++ wc -l
+ BOOK='       0'
+ '[' 0 == 1 ']'
+ NAME=7366STDJxfkpsAF
+ /usr/sbin/scutil --set ComputerName 7366STDJxfkpsAF
+ /usr/sbin/scutil --set HostName 7366STDJxfkpsAF
+ /usr/sbin/scutil --set LocalHostName 7366STDJxfkpsAF
Administrators-Mac:~ root# hostname
7366STDJxfkpsAF
Administrators-Mac:~ root# exit
logout
Administrators-Mac:~ admin$ sudo sh -x /Users/admin/Desktop/name.sh 
++ whoami
+ '[' root '!=' root ']'
++ /usr/sbin/system_profiler SPHardwareDataType
++ awk '/Serial/ { print $NF }'
++ tail -c 9
+ L7SN=JxfkpsAF
++ /usr/sbin/system_profiler SPHardwareDataType
++ awk '/Model Name/'
++ grep Book
++ wc -l
+ BOOK='       0'
+ '[' 0 == 1 ']'
+ NAME=7366STDJxfkpsAF
+ /usr/sbin/scutil --set ComputerName 7366STDJxfkpsAF
+ /usr/sbin/scutil --set HostName 7366STDJxfkpsAF
+ /usr/sbin/scutil --set LocalHostName 7366STDJxfkpsAF
Administrators-Mac:~ admin$ sudo sh -x /Users/admin/Desktop/name.sh 
++ whoami
+ '[' root '!=' root ']'
+ domain=.k12
++ dsconfigad -show
++ awk '/Active Directory Domain/{print $NF}'
+ current=
+ [[ .k12 == '' ]]
++ /usr/sbin/system_profiler SPHardwareDataType
++ awk '/Serial/ { print $NF }'
++ tail -c 9
+ L7SN=JxfkpsAF
++ /usr/sbin/system_profiler SPHardwareDataType
++ awk '/Model Name/'
++ grep Book
++ wc -l
+ BOOK='       0'
+ '[' 0 == 1 ']'
+ NAME=7366STDJxfkpsAF
+ /usr/sbin/scutil --set ComputerName 7366STDJxfkpsAF
+ /usr/sbin/scutil --set HostName 7366STDJxfkpsAF
+ /usr/sbin/scutil --set LocalHostName 7366STDJxfkpsAF
Administrators-Mac:~ admin$

I ran it with and without your AD check. both worked.

My two cents:

1. a useful resource with scripts is to copy/paste them into [http://www.shellcheck.net](link URL) to find bugs in your shell scripts. For example, your shell script will probably do better has a bash (#!/bin/bash) as opposed to a sh script (#!/bin/sh), though I doubt that this is the cause of your issue.

2. another useful troubleshooting resource is to--rather than run the policy through the JSS---run the policy through the Terminal, using a command like:

sudo jamf policy -event <event> -verbose

where <event> is the custom trigger associated with the policy in the JSS.
The output should provide more information why the policy is not working. If the output does not explain things, then copy/paste it for us and we will help.

Thank you. I will look into these suggestions.