I agree. I've always just viewed the distinction as a near-worthless convenience. I also think it silly that the Dim Images option only dims raster images. It should dim (or should provide another checkbox to dim) all content on the layer. There are plenty of reasons one might want to manually trace vector objects as well as raster.
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A template layer is always non-printing.
I prefer to trace in Outline view, so that all paths are transparent and drawn 1-pixel wide, no matter the zoom level. When you toggle Outline View the Template layer stays dimmed and previewed (raster objects only).
It is also a mystery why only raster art is always previewed on a Template layer. Actually, it’s not much of a mystery why an Illustrator feature would only be half implemented and never upgraded in over 20 years. It would be more of a mystery if it worked.
My biggest gripe with the Template layer is that when you create on it is locked by default. What idiot thought that a newly created layer should start out locked so that nothing can be placed on it? Does that idiot still work at Adobe? Is there anyone who is not an idiot at Adobe who has noticed this mistake and made any effort to correct it?
"A template layer is always non-printing"
I know, but what's the point of keeping a non-printing layer. If it only builds up file size? When I'm done with a 'normal' layer, having traced it, I delete it anyway.
It's indeed a useless feature. Starting off locked. The dim feature could indeed also use some improvement, dimming only bitmap images.
I could (and do) use a normal layer, placing the trace image (bitmap) on it, locking and dimming it and trace upon it on a top normal layer. I guess I also could use a (again) normal layer, place bitmap/vector art on it, set it's transparancy to about 75% and lock it. Then trace it by adding a normal layer below it so the locked semi-transparent layer above it would keep shining through. Or something like that.
The best thing would be if a 'template layer' would mean a 75% reverse transparent layer. By reverse I mean that it shines through any layers above it instead that it covers layers below it like normal semi transparent layers. And thus also being able to place vector and bitmap images in such a layer which keeps shining through top layers. That's how I would see 'templates'. I hope adobe will pick up on that.