Currently, creating an Overlay Template from the new Drag-and-Drop Property Category, immediately generates a XAML error related to DynamicResources.

This occurs if creating an Overlay Template either from the ContentControl Item itself, or from a Panel or Layout Element.

See attached video.

Repro Steps:

1) Create a Studio Project featuring a MainPage.xaml

2) Introduce a ContentControl Element to the root Grid, and select it to expose its Properties in the Properties Panel.

3) With the ContentControl selected, navigate to the 'Drag and Drop' section of its Properties Panel, and identify the 'Overlay Template' Property.
Directly to the right of the value field, will be a (+) icon that can be used to create a new Overlay Template compatible with it.

4) Click on the (+), and create a new 'Item' Overlay Template with any name, saved to GlobalResources.xaml
This will open the Template in the Inline Dummy Template Editor.

Observe how a XAML error is produced.

5) Exit the Template Dummy Editor, and return to the MainPage.

6) Select the root Grid, navigate to the 'Drag and Drop' section of its Properties Panel, and identify the 'Overlay Template' Property.
Directly to the right of the value field, will be a (+) icon that can be used to create a new Overlay Template compatible with it.

7) Click on the (+), and create a new 'Host' Overlay Template with any name, saved to GlobalResources.xaml.
This will open the Template in the Inline Dummy Template Editor.

Observe how this also produces a XAML error.

8) Click on the error notification in the lower-right of the screen to check the error in VSCode.

Observe how there is a XAML error related to the DynamicResource of the created Templates.

Expected Results; Pressing the (+) Create Template in the context of a Drag and Drop Item or a Drag and Drop Host, automatically creates a valid, compatible Resource which doesn't generate errors.