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I am not certain I got the root cause of this issue right, but I noticed that the HTML version of the email being sent out inn my test merge had a blank where the name should have been swapped in. Inspecting the html showed that there were tags in the middle of the token - possibly in between some of the parentheses? So naive replacement might have resulted in the replacedment html being interpreted as a malformed tag or something.
Removing formatting from the {{token}} text in my draft fixed it.
It might be worth documenting that this can be an issue.