Yes, customized Templates can be hidden from the Template dropdown.
An administrator can navigate to the Admin Center and manage options from the Template Editor section (Reusable Library & Templates > Template Editor).
Within this section, customized templates include an “eye icon” button. Clicking this button toggles the visibility of the template in the Worksheets page template dropdown menu. This functionality allows administrators to streamline the user experience by displaying only relevant templates related to customized options.