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variables not being picked up when mail sent

Project:Mail
Version:4.7.x-1.x-dev
Component:Code
Category:support request
Priority:normal
Assigned:Unassigned
Status:active

Issue Summary

i've been using the Mail module on my 4.7 site for a few months now, and it seems that the variables, e.g. %username are not being picked up when the mail is sent.

Anyone else seeing this behaviour?
Is there a fix?