Yes, the fromTemplate XOG operation is for creating a new project only.
You may want to take a look at some of the PMO processes for creating projects (from templates) and reviewing the actions available to you there for making changes to a project from a template, in the case where the project record has already been created.
For example, there are system actions on the project for copying the WBS from a template into the project, or copying the staff, and so on. Leveraging these in particular ways may allow you to update an existing project record from a template in the way that you want. Then you would need a way to create an instance of that process - something that a XOG object write action could contain the necessary triggers to do.
I don't know if that would be compatible with your specific needs or not, but I would recommend checking it out.