New pages based upon a template not linking to the template

I'm running the CS6 version of Dreamweaver on a windows 7 PC.

I've created a new template for a site. I added editbable reagions and saved the file in the templates folder as a dwt file.

When I create a new page based upon this template, it does not create as expected. It's as if I created the file based upon the template and then detached it from the template. It does not lock code, does not have editable regions and does not update when I update the template. If I try to reattach the file to the template, it puts the entire page within the editable region of the template. I end up with the page within the page. I can then delete the inner page that is within the editable region and I now have what I expected.

Can someone help me understand why this function is not working? Do I need to reinstall DW,  reset it to out of the box defaults, or something different.