It’s not only the prompt (on opening document after template modification) to accept modifications made or refuse their take-over.
These are the prompt along with save to file operation which effect this (at least if it concerns the “Keep Old Styles”-half of the prompt, the another one not tested).
I needed to learn it on empirical way while the expectation was to learn it from Writer documentation. Designing with LO, 2nd Edition tries to communicate it, but doesn’t in way sufficiently clear. Writer Guide 7.5 doesn’t undertake a try at all, rather it conveys the impression answering prompt would be sufficient. Writer Help seems to have no chance to communicate it as template modifications and propagation of those to linked documents apparently not its objective.
Template modifications take-over in document is a process which runs completely under hood, user gets only the prompt. It is that opacity which may lead to understanding this or that sort when related Writer documentation passages are read.