Thanks, @wooden-engine-7388
The only option I had is to create a new revision from the previously created template (disabling the template did not help, why there is no delete option?).
In the new revision, I allowed the version override as you have shown above.
Then, in the cluster, I changed the template to use the new revision, and only then I could edit the Kubernetes version.
This is a horrible UX in my opinion.
Why can't I:
1. Delete the template?
2. Untick the "Use an existing RKE Template and revision" in the cluster config? So the cluster will be free from any created templates.