Project Template is essentially a set of configurations within Atlassian products and apps ecosystem.
A Project Manager creates a new project from an appropriate project template based on the type of product a customer purchased and what is the rollout process for this specific product, deliverables, milestones, phases, etc.
Project created of a template can be customized based on each specific situation, such as adjusting the timeline based on resources availability, adding customization related tasks, etc.
However, customization should be limited to the extend in which project management methodology is followed with consistency, allowing for accurate reporting.
Here is an example of Project Templates Set for Lead to Cash process lifecycle. Different templates are used by different stakeholders and at different stages of the lifecycle. At the same time, these templates within a set are deeply interconnected and work together to produce the required data for further analysis.
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Jira core configurations are always included into a project template of any kind:
Record Types (= custom issue types), defined by
issue type screen scheme
custom fields and context
data points captured along the record lifecycle
Workflow(s) for each record type, defined by
statuses and
transitions and transition screens
The list of configurations may vary from case to case.