Yeah I would try and bug test iCloud. Your settings and template shouldn’t be reverting.
If you copy your Vault into a non-iCloud location and test it there, does the problem still happen?
If you go into your vault, and look inside the YourVault/.obsidian hidden folder, do you see any weird duplicated files? Another user had a problem with dozens or hundreds of duplicated “workspace” files. And as far I could tell that was an iCloud issue.