Yes, customized Templates can be hidden from the Template dropdown.
A administrator can navigate to the Admin Center, then proceed to Form Content & Templates. From there, access the Template Editor and locate the section called "Forms - Core View & DFMEA". Within this section, customized rows feature an "eye icon" button.
Clicking this button toggles the visibility of the template in the Forms page dropdown menu. This functionality empowers administrators to streamline the user experience by displaying only the relevant forms to all users.