The Field Hopper module aims to be a true time saver by allowing you to harness the power of templating in your workflow. Often-used fields, groups of fields, and sections can be added to your hopper and called up quickly for inclusion in any new form you are building on the site.
Consider the situation in which you need to always add a combo of required Name and Email fields with the same conditions of being required, with specific placeholders, other customized properties that you need consistent across each form. The field hopper provides you a way to insert that group in your form w/o the need of tinkering with the settings each time.
Does updating a template propagate those changes into fields on forms to which the template has been added?
No, this is not currently a feature of the Field Hopper.