UserAgent: Mozilla/5.0 (Macintosh; Intel Mac OS X 10_11_5) AppleWebKit/537.36 (KHTML, like Gecko) Chrome/53.0.2785.101 Safari/537.36

Example URL:
http://dabblet.com/gist/b14333aaa80df09c985ca8d87f4a2baf

Steps to reproduce the problem:
1.  Visit testcase

What is the expected behavior?
Testcase should be green

What went wrong?
Testcase is red

Does it occur on multiple sites: N/A

Is it a problem with a plugin? N/A 

Did this work before? No 

Does this work in other browsers? N/A 

Chrome version: 53.0.2785.101  Channel: n/a
OS Version: OS X 10.11.5
Flash Version: Shockwave Flash 22.0 r0

Yes, variables cannot be interpolated, but they should not be dropped from keyframes. According to spec: 
"Notably, they can even be transitioned or animated, but since the UA has no way to interpret their contents, they always use the "flips at 50%" behavior that is used for any other pair of values that can’t be intelligently interpolated."
(From: https://drafts.csswg.org/css-variables/#syntax )