Folders as templates don’t function correctly when using New from Template. The option instead creates a blank Untitled Folder. If the template folder has one or more files nested, those files are not created at all. If the same folder is converted to file, New from Template works correctly as expected.
Probably valuable to add that it worked as expected in RC6.
I can confirm that this is the case for me as well. New from template was working in RC6, but is not functioning properly in RC7.
This has been filed. Thanks.