As you mentioned, the second occurrence of this name is from a novel, for instance the novelist Liange Yusheng 梁羽生 (1924－2009) was born in a traditional scholar family, thus gained very solid traditional Chinese education background. So I don't believe it is a coincident that the name of one of the 72 students of Confucious 孔子 is being used in his fictions. It is not rare in Chinese that novelist uses some names in history as their fiction character name.
And now let's look at the somehow "strange" or even "bad" name 澹台灭明. Again for instance the person 澹台灭明 in history was born around 500 B.C during the the "Chunqiu" 春秋 (770 B.C - 403 B.C) era, which can help us a lot understanding the name.
First the surname 澹台, it is actually a surname came from location, to be more precise the mountain 澹台山 (Mount Tan Tai). It is unclear whether he inherited the surname from his father or he might be the very origin of this surname because he lived in 澹台山 for a significant part of his life. But either way, name under location name (especially if person isn't from one of the few royal families) is quite a common practice during that era.
Now is the given name 灭明. First of all you probably won't see anyone name their children with this nowadays, or even in the past 1000 years in China. The most direct meaning of these two words can be "eliminate lights", thus it's very much like a curse. In fact the word 灭 (eliminate) itself is rarely used in names (fictions aside). Also notable that there's a dynasty in Chinese history 明 Ming (1368 A.D - 1644 A.D), and 灭明 basically can be meaning "eliminate the Ming dynasty". I am pretty sure you will get serious trouble if you named like that during the Ming's ruling era.
Interestingly, that's exactly what happened to the fiction character 澹台灭明 in Liang Yusheng's novels, who spent basically all his life trying to revenge the Ming dynasty. Reason Liang Yusheng pick this name is probably simple and straight forward, it is quite a badass name (i.e Thanos in avenger is translated to 灭霸 a.k.a lord of elimination) and pretty matching to the character.
Now let's get back to the 澹台灭明 in history. First of all unless there's some time traveling device that we don't know of, there's no way anyone in Chunqiu era would know there's a dynasty called 明 2000 years later. And I don't believe 澹台灭明's parents will give him this name just to curse their child to be blind or something. So what's the reason? Note that time when 澹台灭明 is born, it was still centuries before the 秦 Qin dynasty (221 B.C -207 B.C). Before 秦 Qin dynasty, the ancient China region has been split into handful small countries for centuries, and even though they are nominal vassal of the 周 Zhou dynasty, they are in fact independent, and have very different culture, using different currency, and have very different way of literate or speech. It was only after 秦 Qin brought down the 周 Zhou dynasty and re-unified the whole region, that currency and common writing letters became unified as one for Chinese. Also worth noting that even with unified letter, way of speaking those letter are still significantly different (and that's still happening even nowadays!).
With the historical reason mentioned above, combining with the relatively low literate rate during that era, a significant number of names during the the "Chunqiu" 春秋 era are in after-translate version in unified Chinese words/letter by pronunciation, which may mean very different things than it's origin. I believe 澹台灭明 is one of these cases.