A family of Microsoft word processing software products for creating web, email, and print documents.
What I am noticing with Word 2016 on Windows 10 Pro is that Word files stored on OneDrive are hanging. Not sure it is the same issue, but as you have listed your template is in a OneDrive Folder. Perhaps relocate the template to a folder that is not on OneDrive and test?
When I moved a file from a OneDrive folder to a Non-OneDrive folder, the file opened just fine.
What I also noticed is that when opening the file from the Computer folder Word was inserting special characters for spaces like "%20" which it should only do if opening from a URL. In this case it was opening from the local drive, which probably did not recognize these characters and could be the cause.
-KG