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Hello Kateman, Amanda,
Thank you for providing the details.
I understand that the SharePoint library is already configured to use the server default, Open in the client application, but selecting an .xltm file still downloads it instead of opening it directly in Excel.
Could you please try using Open in app from SharePoint instead of selecting the file name directly?
- Select the .xltm file in Documents > More.
- Select Open > Open in app.
Please let me know whether the file opens in Excel when using this option or whether it is still downloaded.
If the file is downloaded, could you also confirm whether you can open the downloaded .xltm file successfully in the Excel desktop application?
Please also check whether Excel is configured as the default application for .xltm files by going to Windows Settings > Apps > Default apps > Excel. Scroll down to .xltm, select it, choose Excel, and then select "Set default".
After completing these checks, please try Open in app from SharePoint again and let me know the result.
Please update me with the results of these checks so I can better understand the behavior.
Kind regards,