We use a third party tool for document editing and with the latest service release of RDB we introduced an updated version of that tool.
This new version appears to have introduced a new error in some circumstances.
This appears to happen if the source document for the template in RDB is not originally an RTF format document.
To work around the error:
Open a blank document in Word, the Copy and Paste the content of the template into the Word document.
Save it as a .rtf document.
Upload the .rtf file back into RDB and Re-insert all merge fields.
This should then allow you to create new items without the error.