[The Squatter of Amon Rûdh]

I think it's probably more complicated than that. Whatever associations somebody might make, that was the proper form according to the phonological rules JRRT had laid down. To change it to something else would mean inventing a reason for the exception or rethinking the rules themselves, potentially having to change dozens of other names distributed around a frightening array of manuscripts. Also Tolkien preferred to write his way around problems like this rather than simply remove them. In any case, this sort of coincidental double meaning crops up in natural languages all the time. I found a reference once to a Persian personal name Nazgül, meaning 'shy rose'.