The four character badge is very limited in terms of length and how it does not stand out prominently. In the case of a test company, it should be VERY clear the user is in test, so they don't accidentally enter transactions intended for prod. A way better option would be if there was a setting in company information to change the color of the black Dynamics 365 Business Central bar at the top of the page, along with the ability to add text (more than 4 characters) to show right beside the "Dynamics 365 Business Central" heading.