Executing sed throws the error "unexpected EOF while looking for matching"

Here’s the problem.
I’m trying as "root" user to execute a command as "myusername" user.

That’s why I’m using su - $USERNAME -c <command>
The <command> itself is something like sudo sed -i 's|SEARCH_REGEX|REPLACEMENT|' /etc/cloud/cloud.cfg

But each time I execute my script I got an error which seems to be due to the REPLACEMENT part.
I guess this is something around carriage return or spaces.

Here’s the code:

#!/bin/bash
$USERNAME="myusername"
$USERPWD="p@ssw0rd123"
PATTERN='s|preserve_hostname:sfalse|preserve_hostname: truenmanage_etc_hosts: false|'
su - $USERNAME -c 'sudo -S bash -c "sed -i '$PATTERN' /etc/cloud/cloud.cfg"' <<< $USERPWD

And here’s the error I get:

 truenmanage_etc_hosts:: -c: line 0: unexpected EOF while looking for matching `"'
 truenmanage_etc_hosts:: -c: line 1: syntax error: unexpected end of file

The ressources that helped me:
https://linuxize.com/post/how-to-use-sed-to-find-and-replace-string-in-files/
https://linuxhint.com/50_sed_command_examples/

What am I doing wrong ?

REGEXP="preserve_hostname:sfalse"
REPLACEMENT="preserve_hostname: truenmanage_etc_hosts: false"
PATTERN="s/$REGEXP/$REPLACEMENT/"
su - $USERNAME -c "sudo -S bash -c 'sed -n -i "$PATTERN" /etc/cloud/cloud.cfg'" <<< $USERPWD