Per my understanding, this error occurs only when you are trying to create a new document via OWA using a templated located in the parent site.
I can reproduce this issue in my test environment. The document gets created in IE11 but returns “Failed to create the file” error in other browsers, which uses OWA to create new documents by default since they lack the “SharePoint OpenDocuments Class manage” add-on. The document works as expected in all browsers and OWA after creation.
Also I have found another post suggesting the same issue with OWA: Office Web App Failed to Create a file using Parent site document template in subsite.
It seems to the default behavior/known issue in OWA.
I would suggest you change the document templates source to the same site level to avoid this error, if you need to use browsers other than IE.
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