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On the template selector dialog box, clicking the 'Create new Template' radio button, and navigating to a template, ArcMap produces the following error:
"The template you selected does not have
any layout information. Please select another template."
A map template cannot be selected to create another new map template from this dialog box.
To create a new map template, open an existing template, modify it, and save it as a new map template with a new name.