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I've read a book with a character named Poppy in it and it felt fine, not too nicknamey. The only way it wouldn't work is if the story takes place in a era when nobody would ever be named Poppy. I would actually find a character called Persephone/Penelope "Poppy" much more nicknamey and distractingly twee. But that's just me.

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I second the idea of Poppaea, if you want a longer version. I always liked that name.