Ansible unable to check for undefined vars using with_items

gistfile1.txt

[michael@dca-infra01 ansible]$ cat /home/michael/ntoggle/ansible/roles/ntoggle.helix-service/tasks/required_vars.yml - name: check required variables are defined
  fail: msg="Variable '{{ item }}' is undefined"
  when: item is not defined
  with_items:
    - foo
    - bar

- fail: msg="foo"
  when: foo is not defined
  
  [michael@dca-infra01 ansible]$ cat /home/michael/ntoggle/ansible/roles/ntoggle.helix-service/tasks/main.yml 
---
# All of these MUST be set by each individual DSP environment.
- command: echo 'hello'

#- debug: msg="{{bar}}"

- include: required_vars.yml

- command: echo 'bye'

[michael@dca-infra01 ansible]$ cat inventory/ntoggle/group_vars/loadtest.yml 
#foo: "test"
#bar: "2"

[michael@dca-infra01 ansible]$ ansible-playbook -i  inventory/ntoggle playbooks/helix/engine.yml --extra-vars="target=loadtest" --module-path ./modules 
[DEPRECATION WARNING]: Instead of sudo/sudo_user, use become/become_user and make sure become_method is 'sudo' (default). This feature will be 
removed in a future release. Deprecation warnings can be disabled by setting deprecation_warnings=False in ansible.cfg.
 [WARNING]: Slack Webhook URL was not provided. The Slack Webhook URL can be provided using the `SLACK_WEBHOOK_URL` environment variable.


PLAY ***************************************************************************

TASK [setup] *******************************************************************
ok: [loadtest2.internal.ntoggle.com]

TASK [datadog_event priority=low text=BEGIN - Nroute deployment api_key={{datadog_api_key}} title=Deployment of helix] ***
changed: [loadtest2.internal.ntoggle.com]

TASK [ntoggle.helix-service : command] *****************************************
changed: [loadtest2.internal.ntoggle.com]

TASK [ntoggle.helix-service : include] *****************************************
included: /home/michael/ntoggle/ansible/roles/ntoggle.helix-service/tasks/required_vars.yml for loadtest2.internal.ntoggle.com

TASK [ntoggle.helix-service : check required variables are defined] ************
skipping: [loadtest2.internal.ntoggle.com] => (item=foo) 
skipping: [loadtest2.internal.ntoggle.com] => (item=bar) 

TASK [ntoggle.helix-service : fail msg=foo] ************************************
fatal: [loadtest2.internal.ntoggle.com]: FAILED! => {"changed": false, "failed": true, "msg": "foo"}

PLAY RECAP *********************************************************************
loadtest2.internal.ntoggle.com : ok=4    changed=2    unreachable=0    failed=1