After speaking with support, it sounds like in order for the following syntax to work, it needs to be forced into an expression.
At {eventTime|hh:mm:ss}, alarm "{name}" at "{displayPath}" transitioned to {eventState}.
Would then become:
'At '+"{eventTime|hh:mm:ss}"+', alarm '+"{name}"+' at '+"{displayPath}"+' transitioned to '+"{eventState}"+'. '
Once done, the issue with the tag references appears to have resolved itself.
Definitely an issue to be aware of when upgrading from 7.9 to 8.1.2.