Change icon for cover open and closed

Configuration
2

Did you just make this up and hope it would work or did you copy it from somewhere?

    icon: >-
      if (state === 'open') return 'mdi:window-shutter-open'; else return
      'mdi:window-shutter';

The core lovelace entities card is not template-able.

You have to use a custom card to do this.

Alternatively, if you used the template cover integration you can define an icon template in your config.