Fuddled priest embraces one more fuddled (7)
I believe the answer is:
tipsier
'more fuddled' is the definition.
('tipsy' can be a synonym of 'fuddled')
'fuddled priest embraces one' is the wordplay.
'fuddled' is an anagram indicator.
'embraces' is an insertion indicator.
'one' becomes 'i' (Roman numeral).
'priest' with letters rearranged gives 'tpsier'.
'tpsier' going around 'i' is 'TIPSIER'.
(Other definitions for tipsier that I've seen before include "Less sober" , "Happier" .)