In ERPNext v12, there is an issue with the Requested For field of the Material Request document. When the reason for the Material Request is entered in the Requested For field, system displays an invalid email error message. See screenshots below:
Yes by design the requested_by Data field expects a valid Email address.
To look up and check that doctype’s definition, try say this http://192.168.0.241/desk#Form/DocType/Material%20Request