Tokens/substitutions silently fail when passed into the "Arguments" text field in Panels UI

I am trying to manually pass in a token/substitution into the "Arguments" text field in a view pane configuration window, and there is a serious problem. The token (in this case %term:root:tid) successfully outputs the integer "2" on the public page when I pass it into the "Override title" text field at the top, so I know that my token syntax is correct.

However, when I pass the same token into the "Arguments" text field down below, the view now fails to output on the public page. When I simply type "2" manually into the text field, then the view SUCCEEDS to output on the public page. So I know that the view argument is correct.

I have therefore deduced that this must be a bug in Panels -- that one can use Substitutions all throughout a pane configuration, with the surprising exception of the "Arguments" text field, the one place where it would be fabulously useful!