I just saw an article by Rabbi Ezra Frazer on Kol Torah http://koltorah.org/volume_16/Yitro.html that makes some similar observations. Worthwhile reading!
One particular point worthy of noting is his citation of the Orach Chayim,
The Or HaChaim (18:1-2) observes part of this shift in Yitro’s titles, and suggests that the Torah is subtly praising Yitro; as a prominent Midyanite priest, he married off his daughter to a complete stranger, without worrying about his image as a priest. Moreover, by now visiting Bnei Yisrael in the wilderness and by praising their God for Yetziat Mitzrayim, Yitro demonstrates that he prefers being known by his son-in-law, Moshe, to his own lofty title of priest of Midyan. The Or HaChaim thus reads the words “VaYikach Yitro Chotein Moshe,” “And Yitro the father-in-law of Moshe took” (18:2) homiletically to mean that Yitro took for himself the title “father-in law of Moshe” and all that it represents, while he rejected the aforementioned title of priest of Midyan and its pagan associations.