I think the syntax <%= recipient.targetData.field1 %> is not correct. Try removing this field and check. Also the <%= targetData.xxx %> fields are not visible in preview of email. Try sending a proof and check the result.
I've just tried this, adding in the targetData as additional data for the seed following the instructions in this post - targetdata is not defined - and unfortunately I get the same error when trying to send the proof (screenshot below).