When I delete item in templates, they are deleted from all hosts that use this template.
We are used to this. We are not suprised that answering "yes" to confirmation deletes host data.

But now Templates and Hosts have separate UI and this allows improvement:
Split "Delete" into "Unlink & Delete" vs "Recursive Delete"/"Clear & Delete".

"Unlink & Delete" deletes only from template, unlinking all downstreams.
"Recursive Delete" works like current delete, deleting all downstream items and data.