I once heard Rabbi Shmuel Niman, Mashgiach Ruchani of the Chafeitz Chaim Yeshiva, say that he had "recently learned" that it is improper to give a child parts of the names of two relatives. For example, if you had a grandmother Rachel Leah and another named Esther Malka, Rabbi Niman would say you can't name a baby Rachel Esther to honor both? Has anyone else heard this? Would you know the source?
The sefer "Viyikare Shemo Beyisroel" (page 84) brings two views on the subject. Some consider combining two names as a completely different name that has no association to either, while others have no problem. He writes that the prevalent custom is like the later opinion.
The sources he brings: Bris Avos (8:39). Pe'er Hador (vol. 4 pg. 200). Yabiye Omer (5 Y.D. 34). Betzel Hachochma (1:34). Beer Moshe (1:60:2). Ben Ish Chai (Shana Shinya Parshas Shoftim 27). Shut Sdei Haaretz (3:22).
To quote my own answer from another question:
According to Rabbi J. David Bleich (in the first class of of his Ishut series in 2010, which alas YUtorah.org does not have. Here is the first class the next year, which hopefully includes him saying that link), the value of naming after a relative is Kabbalistic. He went on to say that this Kabbalistic benefit* only takes effect if in fact the name is identical. So if I name my child Moshe because it was my grandfather's name, or Chaim because it was my other grandfather's name, some sort of benefit goes to those relatives. If I name him Moshe Chaim, no such benefit goes to either of them.
However, Rabbi Bleich thinks the value of making family happy is greater than the value of Kabbalistic benefit. So, naming with an initial, or a gender-flipped equivalent, or a translation, or such does not achieve Kabbalistic benefit. It does achieve happiness of family (presumably), and as such is of value for that reason.
*(This benefit may be to the deceased who get some form of extra credit from their namesake's mitzvot over and above the credit the relative would ge for descendant's mitzvot. Alternatively, it might be that the baby gets extra doses of good midot from the deceased (which frankly could work without Kabbalah, and merely through psychology). Or it could be both. I am not a Kabbalist.)