Think of a large template with many attributes like classes and structure. When you want to render this multiple times you just have to update a few things for the unique instance instead of recreating the structure and classes over and over.

This, and separation of concerns. HTML stays in HTML or your preferred SSR template where it belongs.

Another reason I like <template> is the ease of prototyping. A very straightforward approach is to mock up your HTML+CSS with placeholders of what your populated elements might look like. Instead of translating that into JS element generation code, you can simply remove the populated data and enclose the barebones element in a <template> tag.

Back in JS, you might have a simple initializer to add these elements as needed and a function to (re)populate them.

Simple, to the point and no libraries or frameworks required.