Here is a Rename Preset which I think does what you've asked for:
Example results:
For reference, this is the script inside the preset (.orp file) above:
function OnGetNewName(getNewNameData)
{
var name = getNewNameData.newname;
var words = name.split(" ");
var w1 = words[0];
var w2 = words[1];
if (words.length < 1 || w1.length < 1)
return;
if (w1.toUpperCase() == "THE")
w1 = "T";
var result;
if (w1.length > 1)
result = w1[0] + w1[1];
else if (words.length > 1 && w2.length > 0)
result = w1[0] + " " + w2[0];
else
result = w1[0];
return result + "\\" + name;
}
EDIT after 5 minutes: Fixed it for when the input folder name is only one character long.