Remove username in emails or swap username for email

I think you just need to take the md5() out of this line:

$result['user_name'] = md5($result['user_email']);

I’m not that familiar with buddy press but if empty($result['errors']->errors['user_email']) being true means a user was succesfully registered I’d use something like

wp_update_user( array( 'ID' => $user_id, 'name' => $result['user_email'] ) );