Daily Note Time Template Not Working

I set up the time format I want for templates, so that {{time}} should display what I want. (see screenshot)

screenshot-04-01-2022-10-38-19

It works fine when I click the insert template button (see screenshot),

but when I start my daily note, which I’ve set up to automatically use that template, it does the following instead (see screenshot). What am I doing wrong?

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