If a repo has a different name than LICENSE for the license, they (github) do not try to parse and detect license, probably the reason third-party stuff “breaks”.
Anyway, probably something we could fix, but not an priority (and could break some scripts we have, don’t remember).
github is parsing and detecting the license just fine (the “view license” link on the right works correctly), it’s just this third party “badge service” that fails.
No, then the text would be “GPL v2 etc etc”. All GitHub knows is that we have a license file, not the content, because it does not parse it. If you click the license file the GitHub generated license header is also missing (would be present if GitHub parsed the file).