Yeah, I agree, I find them hard to read. JSX is the best thing I've used. Elsewhere in the thread someone mentioned Cotton which seems to strike a different balance.

To be honest my main problem with templates is they have to be one per file. In principle there's no difference between naming a new file and naming a function, but in practice it just sucks. It's a higher barrier so people are less likely to write smaller components, and refactoring support completely sucks. Even renaming a template is a massive pain whereas renaming a function with decent LSP support is easy.

JSX hits that perfect balance between readability while still being regular functions. Maybe something is possible with the new 3.13 template strings?