Using Classic Outlook on Windows for personal email, calendar, and contact management
To anyone else facing a similar problem I think I have found a workaround. Open 'New Email Message Using' and right click, then select 'Add to Quick Access Toolbar'.
Once done this will create a shortcut to add templates within the window quick access toolbar at the top of your Outlook window;
From here I was able to open my templates without issue. Hope that might helps someone else as I have been playing with this for ages looking for a solution.