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".
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.
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
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.