No No! I think we have a misreading of a rule here. I'm looking at Formats Rule 1 6c (1) that you have cited and I do not see that is says proper names are not to be contracted. In fact is says that "When used in an English context, foreign proper names and personal titles are considered anglicized... and it goes on to say what consittutes this type of name!
Go ahead and use contractions in this case in both textbook and literary transcriptions when you have foreign names in the English context. Again, I don't see anywhere that it says not to contract foreign names. Perhaps you are confusing this with something else.