[Resolved] Content template not working with 2022 theme
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What I did was to enable the "Theme support for Content Templates" settings and view the post on the frontend to see which function the theme is using to render its default content. Then I copied this function into the template function setting.
In this case the function being used was "render_block_core_post_content".
Once I added this custom function then the content template started showing up fine on the frontend.