A family of Microsoft word processing software products for creating web, email, and print documents.
In Windows File Explorer, what happens when you double-click a file will depend on what is set to be the default action. For Word documents (*.docx), the default action is to open the document for editing. For a Word template (*.dotx), the default action is to create a new document based on the template.
If these actions are not working properly, running an Office repair would be the first line of attack (see https://support.microsoft.com/en-us/office/repair-an-office-application-7821d4b6-7c1d-4205-aa0e-a6b40c5bb88b). Unfortunately, if the repair does not work, you may have to resort to registry editing which will be convoluted when dealing with file associations.
Note that when you select an Word file in a list of recent files, Word will open the file for editing (no matter if it is a template or document file). You are explicitly choosing to open the file from within Word.