enhancement: drop template folder from .squad

[serbrech]

The .template folder is large and I think unecessary in a repository that uses Squad.
It should not be added when running squad init.
the templates are already embedded in the CLI, and during an upgrade, you can diff the actual squad runtime files against the ones in the CLI, rather than the copied tempalte files.

If the user wants to modify templates, we can still support adding a template file as an override, but by default there is no need to have the full template folder in the repository.

Why that change matters?

The outcome of squad init is scary (so many files!) and squad upgrade needs to keep all of them in sync (huge diff)

[tamirdresher]

Hey @serbrech — great observation, the init output is definitely intimidating and squad upgrade diffs are noisy because of it.

One concern with the "embed in CLI" approach: Squad is designed to be portable and CLI-independent. The .squad/ folder + squad.agent.md governance file is self-contained — it works on Copilot CLI (with or without the squad CLI installed), VS Code, GitHub.com, and any future Copilot surface. The coordinator reads templates at runtime via file reads, not CLI commands.

If templates move exclusively into the CLI binary, you create a hard dependency on the squad CLI for coordinator functionality that currently works everywhere. Users who adopt Squad by copying the folder structure (or getting it via a PR) without installing the CLI would see failures — the coordinator tries to read .squad/templates/ceremony-reference.md etc. and gets file-not-found.

What's already happening in v0.11.0:
Brady's been extracting template content into .squad/skills/ (e.g., \coordinator-init-mode, \coordinator-response-mode, \coordinator-source-of-truth). Skills feel less scary than templates because they have clear purpose and naming. The long-term direction is: templates gradually become skills or get inlined into the governance prompt, and the template folder shrinks organically.

Possible middle ground:

• Don't emit templates during \squad init\ by default (reduces init shock)
• Keep them as an optional override layer (\squad init --with-templates)
• The coordinator falls back to embedded defaults when templates aren't on disk (but the defaults must still be defined somewhere portable — either inlined in \squad.agent.md\ or as skills)

The key constraint: whatever solution ships must work for users who don't have the squad CLI installed — just the .squad/\ folder and a Copilot surface.

[serbrech]

In that case, what are the copies used for under .squad directly?