Frankly, I know little about restricting formatting because I don't use it. But I'm trying to duplicate your result--and can't. When I go to the restrict tab and click select all > restrict, everything get restricted except:
Default Paragraph Font
No List
Normal
Table normal
And when I select Normal or any of the other three, the Restrict button is greyed (unavailable). This is what I expected because these four items are among the mandatory styles in Word that cannot be deleted from a document (the others are headings 1 to 9).
Try creating a another based on your template. Does it have only the expected restrictions? If yes, copy everything but the last paragraph mark (if the document has section, do this section by section) into a new document based on your template. Is Normal
still locked? Are the other style restrictions as you set in the template?