Seems like MutationObserver is not working on a <template> tag.
https://jsfiddle.net/brhya5uj/
What's the best way to get notified when a <template> changes?
Per the specification template element doesn't have any children. Instead, the contents is placed inside content property, which you should observe:
new MutationObserver(console.log)
.observe(document.querySelector('template').content, {childList: true, subtree: true});
More info: https://developer.mozilla.org/en-US/docs/Web/HTML/Element/template