Dear James,
Good day! Thanks for posting in the community. We are happy to help you.
According to your description, for the option "Create modern template", I assume you mean the option mentioned in the reference: Create a modern template in Microsoft Syntex. If so, I have checked on my side and searched a lot, but I didn't find this option on my side or any settings that may cause this situation.
Based on the situation, I would like to suggest you contact your admin/IT department and let them create a support ticket via Microsoft 365 Admin Center> Support> New service request. That support team there will have the correct channel and resources to help you investigate more and find what exactly the reason has caused this situation.
Appreciate your understanding and patience.
Sincerely,
George | Microsoft Community Moderator