Resolve "Choosing “Initialize repo with a README” breaks project created from template"

app/views/projects/_import_project_pane.html.haml

@@ -63,4 +63,4 @@
     = form_for @project, html: { class: 'new_project' } do |f|
       %hr
       = render "shared/import_form", f: f
-      = render 'new_project_fields', f: f, project_name_id: "import-url-name"
+      = render 'new_project_fields', f: f, project_name_id: "import-url-name", hide_init_with_readme: true

app/views/projects/_new_project_fields.html.haml

 - visibility_level = params.dig(:project, :visibility_level) || default_project_visibility
 - ci_cd_only = local_assigns.fetch(:ci_cd_only, false)
+- hide_init_with_readme = local_assigns.fetch(:hide_init_with_readme, false)
 
 .row{ id: project_name_id }
   = f.hidden_field :ci_cd_only, value: ci_cd_only
@@ -48,15 +49,16 @@
   = link_to icon('question-circle'), help_page_path("public_access/public_access"), aria: { label: 'Documentation for Visibility Level' }, target: '_blank', rel: 'noopener noreferrer'
 = render 'shared/visibility_level', f: f, visibility_level: visibility_level.to_i, can_change_visibility_level: true, form_model: @project, with_label: false
 
-.form-group.row.initialize-with-readme-setting
-  %div{ :class => "col-sm-12" }
-    .form-check
-      = check_box_tag 'project[initialize_with_readme]', '1', false, class: 'form-check-input'
-      = label_tag 'project[initialize_with_readme]', class: 'form-check-label' do
-        .option-title
-          %strong Initialize repository with a README
-        .option-description
-          Allows you to immediately clone this project’s repository. Skip this if you plan to push up an existing repository.
+- if !hide_init_with_readme
+  .form-group.row.initialize-with-readme-setting
+    %div{ :class => "col-sm-12" }
+      .form-check
+        = check_box_tag 'project[initialize_with_readme]', '1', false, class: 'form-check-input'
+        = label_tag 'project[initialize_with_readme]', class: 'form-check-label' do
+          .option-title
+            %strong Initialize repository with a README
+          .option-description
+            Allows you to immediately clone this project’s repository. Skip this if you plan to push up an existing repository.
 
 = f.submit 'Create project', class: "btn btn-create project-submit", tabindex: 4
 = link_to 'Cancel', dashboard_projects_path, class: 'btn btn-cancel'

app/views/projects/_project_templates.html.haml

@@ -5,4 +5,4 @@
 
 .project-fields-form
   = render 'projects/project_templates/project_fields_form'
-  = render 'projects/new_project_fields', f: f, project_name_id: "template-project-name"
+  = render 'projects/new_project_fields', f: f, project_name_id: "template-project-name", hide_init_with_readme: true

changelogs/unreleased/50808-choosing-initialize-repo-with-a-readme-breaks-project-created-from-template.yml

+---
+title: 'create from template: hide checkbox for initializing repository with readme'
+merge_request: 21646
+author:
+type: other

spec/features/projects/new_project_spec.rb

@@ -66,12 +66,34 @@ describe 'New project' do
   end
 
   context 'Readme selector' do
-    it 'shows the initialize with Readme checkbox' do
+    it 'shows the initialize with Readme checkbox on "Blank project" tab' do
       visit new_project_path
 
       expect(page).to have_css('input#project_initialize_with_readme')
       expect(page).to have_content('Initialize repository with a README')
     end
+
+    it 'does not show the initialize with Readme checkbox on "Create from template" tab' do
+      visit new_project_path
+      find('#create-from-template-pane').click
+      first('.choose-template').click
+
+      page.within '.project-fields-form' do
+        expect(page).not_to have_css('input#project_initialize_with_readme')
+        expect(page).not_to have_content('Initialize repository with a README')
+      end
+    end
+
+    it 'does not show the initialize with Readme checkbox on "Import project" tab' do
+      visit new_project_path
+      find('#import-project-tab').click
+      first('.js-import-git-toggle-button').click
+
+      page.within '.toggle-import-form' do
+        expect(page).not_to have_css('input#project_initialize_with_readme')
+        expect(page).not_to have_content('Initialize repository with a README')
+      end
+    end
   end
 
   context 'Namespace selector' do