[SalesForce] change the notification email sent when transferring a record to a new owner

I'm not totally sure why the recipient is not taking the owner field from the record. I set up a scenario where I have the following:

Selected Recipients

My Custom Object Owner

Then took the following actions

1. As User 1 set the owner to User 2 and saved record.
2. As User 1 change the status to Assigned and saved record
3. Received email with recipient.Name set to User 1 even though the record owner was User 2.

Perhaps I'm misunderstanding something about the usage of Owner in this scenario, but it isn't obvious to me. I expected the recipient.Name to come from the owner field.

You can get around it by using the relatedTo merge field.

<messaging:emailTemplate subject="Status of My Custom Object Changed" recipientType="User" relatedToType="My_Custom_Object__c">
<messaging:plainTextEmailBody >
Recipient Fields:
recipient.Name: {!recipient.Name},
recipient.FirstName: {!recipient.FirstName} 
recipient.LastName: {!recipient.LastName}

RelatedTo Fields:
relatedTo.Owner.Name: {!relatedTo.Owner.Name}
relatedTo.Owner.FirstName: {!relatedTo.Owner.FirstName}
relatedTo.Owner.LastName: {!relatedTo.Owner.LastName}

</messaging:plainTextEmailBody>
</messaging:emailTemplate>

You want to look into using DMLoptions in your Apex.

See the docs below but the general usage is as follows

Database.DMLOptions options = new Database.DMLOptions();
options.EmailHeader.triggerUserEmail = true;
database.update(your_object, options); 

https://www.salesforce.com/us/developer/docs/apexcode/Content/langCon_apex_dml_database_dmloptions.htm#EmailHeaderProperty-B5377B04