With an exception of the "is" and "is not" operators in the Email name constraint, the rest of the operators, including the "contains" operator, do not look for the perfect match in the email name (and hence ideally, you should not see an error in the SL with the contains operator even though you don't have any such email in your instance).
@lukea , if you're still seeing this issue you can reach out to the support team to look for what exactly the issue is as this is something that isn't expected.
FYR, I do not have any email that has the keyword "foo" in the instance, and still, I don't get the red squiggly line in the email name constraint per the below snapshot -
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