first create a folder in your config directory called “templates”.
then under that folder create folders called “sensors”, “climates”, “covers”, “switches”, etc. Basically create a subfolder in the templates folder for any domain that you had a template for in those other folders.
then move all of the yaml files from your other included folders that contain templates (things that have “platform: template” in the config). if those files contain other platforms other than “platform: template” entries then leave the original file in it’s original location and just move the entries that are “platform: template” from those files to the new folders/files.
then perform the conversion from the old legacy “platform: template” version to the new template domain version in the new files per the repair notification.
once that’s done then in configuration.yaml add another include:
template: !include_dir_merge_list templates/
do a config check. if all is good then restart HA.
If you are using !include_dir_merge_list the yaml parser is only limited by your system file system or system memory.
Theoretically you could have thousands of levels of subfolders as long as the full file path name doesn’t exceed your OS’es limitations and as the yaml parser doesn’t exceed system memory while recursively processing the subfolders.
Welp with this Breaking Change I decided it was time to do some serious house cleaning in home assistant and completely rebuilt it from the ground up updated it to the latest, redid all the templates to meet the change redid the scripts and Automations only took about a month to get through it all, but now the stuff that is no longer valid is gone and everything is now more organized and built through the GUI instead of direct yaml editing
for those that helped me understand the breaking change thank you