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Incident report
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Resolution: Fixed
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Blocker
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1.9.6 (beta)
According to http://www.zabbix.com/documentation/2.0/manual/appendix/macros/supported_by_location it should be substituted by visible host name.
The bug affects both frontend (at least Availability Report) and server.
Update:
{HOSTNAME}is correctly replaced by host name. No need to fix it in code.