Hi Mat
This is another old favourite, I'm afraid.
There are two ways of using SVG: either one can embed an entire SVG document in an image tag, or one can directly insert an SVG element within the HTML output.
Using SVG images makes the images entirely independent from the page, while using embedded SVG elements allows the SVG to be styled with CSS.
The gotcha here is that SVG documents must start with an XML declaration <?xml version="1.0"?>; it won't be recognised as an SVG image without it.
Just to add that none of this is specific to TiddlyWiki, this is just how SVG works. The only "quirk" that is added by TiddlyWiki is the ability to generate SVGs through wikification.
Best wishes
Jeremy.