Unable to create sensor template

Did you change this:

- platform: template
  sensors:
    alarm_arm_status:
      entity_id: binary_sensor.alarm_arm_status  #### <-----HERE
      value_template: >-

Or is it still:

- platform: template
  sensors:
    alarm_arm_status:
      entity_id: sensor.alarm_arm_status
      value_template: >-

This is the entity id that HA monitors for changes to know when it should update the template. It should be like the first example, binary_sensor..., not sensor...