The earliest recollection of this bug is traced back to PAN-OS 8.1.6 - January 09, 2024. This bug is fixed in PAN-OS versions 8.1.6. Fixed an issue on Panorama M-Series and virtual appliances where Dynamic Updates ( Device Dynamic Updates ) did not allow local overrides on an existing template. For more information: https://docs.paloaltonetworks.com/pan-os/8-1/pan-os-release-notes/pan-os-8-1-addressed-issues/pan-os-8-1-6-addressed-issues