Dear Anne,
Good day! Thank you for posting in Microsoft Community, we are glad to assist you here.
Based on your post we understand you are encountering error in creating template in Outlook for web, but to move further, could you please confirm if you are using Microsoft personal mailbox service (Outlook.com) or Microsoft 365 business mailbox service? (Outlook.office.com)
If you are using M365 business mailbox service, the error occurs if the total size of all templates in the My Templates app is more than 32 kilobytes (KB). The My Templates app has a total size limit of 32 KB for all templates, could you please help to double check the size for the template? Thanks. More information please read Cannot save templates in My Templates - Exchange | Microsoft Learn
or you can try to Clear your browser's cache and cookies, then try to create the template again or Try using a different browser or device to create the template.
Regards,
Microsoft Community