Normally from a geographical location or property near where they are first identified on the surface (if from mapping) or from drill core (if identified from a well).
So the Bitter Springs Fm would have been surface mapped at a place called Bitter Springs (presumably a bitter-tasting water spring), while for instance the Muggleton Fm in the Bowen Basin is so named because it was first encountered in drilling of the well Muggleton 1.
upper bitter springs formation, page-4
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