The ToolTipTextNeeded is never fired for this element, and setting the ToolTipText for TokenizedTextBlockElement in TextBlockFormatting does not apply a tooltip for the element.

Workaround - set the ShouldHandleMouseInput to true:

  void radAutoCompleteBox1_TextBlockFormatting(object sender, TextBlockFormattingEventArgs e)
        {
            TokenizedTextBlockElement token = e.TextBlock as TokenizedTextBlockElement;
            if (token != null)
            {
                token.ToolTipText = "Testing Tooltip";
                token.ShouldHandleMouseInput = true;
            }
        }