It works.
Show the exact scenario: provide your template, and sequence of actions to get the problem. I will look at the description, try to reproduce, and - most likely - will show what needs to be changed in the template; or - it is possible, too - will find a bug, and file a bug report. In any case: it is intended, expected, designed to work.
Absolutely no. Electronic documents are absolutely orthogonal to typewriters. The latter are about putting black paint in specific shapes to sheets of paper. The former are about creating structured information. The final output to paper is just one possible use of the end result of the word processors. No fixed layout. No physical paper. No requirement to use keyboard.
The whole intent behind the word processors is to change the way of working on documents - from trying to think about formatting first (something absolutely inevitable in case of typewriter, where what you type is fixed), into thinking about semantics of text, with ability to re-layout, re-format, at any later stage. The change of the paradigm is so fundamental, that trying to think of word processor as “Typewriter 2.0” is the direct misuse of the tool.
My strong suspicion is that all your “that does not work” is just fixation on the word “template”, without seeing the more important word “style”.