On the main page it says one need to use "{$1}" (in some cases). But that did not really work, as it left behind the two brackets in the replaced text.
But by using "${1}" instead of "{$1}" I got the intended result.
(not sure if this is a relative new thing for which the main page is not update yet. kinda tricky if this is something that is version (or something else) depended ... which I don't know.)
Using v1.7 btw (replace_text page-interface)