Is there a verb for replacing placeholder values with actual values in a template?
The verb for transforming "Hello FirstName LastName" to "Hello John Smith".
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One possibility is you populate the template (that's over 1000 written instances in Google Books).
Note that this use of populate is a bit "geeky", and thus likely to be restricted to software contexts. For more general contexts, it's worth noting that Google Books has nearly 9 times more instances of fill in the template.
I think you can use substituted. I derive this from @deadrat's comments above - "The OP's situation seems to call for 'parameter substitution.'"
use or add in place of/replace
In your case,
The placeholders, firstName and lastName were substituted with the actual values "John" and "Smith" respectively.
The verb is
meaning to represent something by an instance. The act of instantiating is an instantiation:
the representation of (an abstraction) by a concrete example (logic)
the process of deriving an individual statement from a general one by replacing the variable with a name or other referring expression
When referring to a template as a whole:
"Populate the template" "Fill in the template"
Here, the word 'template' should provide some context about there being placeholders that are being replaced.
However, if the verb is used without the word template in the context, it is not as clear that only specific placeholder part is being replaced:
"Populate first name" "Fill in first name"
In such a case, the word 'emplace' might be better: "Emplace first name"
Or maybe 'embed'?