What steps will reproduce the problem?
1. Set up a phrase for ThinkOutLoud that contains %T. For ease of reproduction set speakchance to 100%. For example 'Have at you %T!'.
2. Use the associated skill on a named NPC e.g. a Hero/Lord in a Public Quest final stage.

What is the expected output? What do you see instead?
What should come out is 'Have at you Bob!' where Bob is the name of the Hero (not a very heroic choice of name I know).
What does come out is 'Have at you <notarget>!'

What version of the product are you using?
1.1.5

Do you have an error log of what happened?
No.

Suggestion:
If this turns out to be a limitation of WAR's scripting system, e.g. one cannot retrieve these names, an alternative might be to suppress the output in cases where the phrase contains %T but %T could not be resolved?