Renamed external drive still appearing in terminal with both old and new names
My first guess with the elements you give is that something went wrong while renaming. The old drive you see in Volume is the old mounting point of your drive and it still contains the index file for spotlight.
I would just delete this folder using:
sudo rm -rf '/Volumes/Mercury 1TB'/.Spotlight-V100
sudo rmdir '/Volumes/Mercury 1TB'

*Updated after nohillside's comment in the thread down below.