How to set environment variables dynamically for command?

I would like to use some kind of minimalistic template engine with pure bash and envsubst:

user@host:~$ env -i FOO=foo BAR="bar baz" envsubst '$FOO,$BAR' \
  Reason: set -x shows that the argument for env becomes one giant string:

sh + env -i 'FOO='\''foo'\''' 'BAR='\''bar' 'baz'\''' envsubst #... env: ‘baz'’: No such file or directory ``` I must have missed a shell escape lession (again...). How might I rewrite last example to work properly?