Establishing input_select options from a template

Input Selects do not support templating. You can check whether a given configuration variable accepts templates by looking in the “Configuration Variables” section of the integration’s docs.

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The word directly after the variable name is the accepted data type; if it doesn’t say “template”, then templates are not accepted for that variable.

You will need to use a Template Select as Magnus stated above. In addition to the official docs linked above, there is a Community Cookbook article about them available:

https://community.home-assistant.io/t/template-select-entities/715177