I would say you should perform userProfileLookup() on control1.

you seems to have just user display name in control2, which need not be unique and so need not to resolve correctly.

Problem is, when I do that, it also doesn't work... I think it's because even Control1 doesn't have the true display name, it only seems to have a plain text value?

does it work if you supply to userProfileLookup() function user 'identifier' directly instead of reference to control1 or control2?

use one of these identifier formats:

lookup format:             <user ID>;#<user name>

fully qualified user:    <claim>|<domain><user>

Instead of manager have u tested for other values like "PreferredName" ,"FirstName" ?

I would try something along the lines of what aditya gandhe​ mentioned. Try testing other values, specifically PreferredName.

How is the list (that is being lookedup) being populated? Is it just text? Do you have the option to convert it to a user (people picker)? I would try that because it would eliminate a lot of issues moving forward.

Hope this helps!

I am trying something similar, to go down a list where 1 column is a people picker and then extract the employee ID for that person. 

I thought I needed to create the column as Single Line of Text (called emp_number) then start a workflow which has an Update Field action which I have configured this way:

normally the employee ID has an field ID before the value, so I think i need to use parseLookup to get the value of the employee number.

Is there a better way to do this?