Vue version

3.2.37

Link to minimal reproduction

https://codepen.io/leaverou/pen/abYByOO?editors=1010

Steps to reproduce

Visit testcase.

What is expected?

Both custom elements should render identically

What is actually happening?

The custom element inside the Vue app renders an empty iframe, because the <template> element's content is being emptied by Vue.
Template elements inside the app but not inside a custom element do retain their contents.

System Info

No response

Any additional comments?

No response