During installation process, new custom field is added to your JIRA instance.
After installation process new position Template issue is available on Custom fields list like on picture below.
This custom field can be added to any screens where users should have possibility to tick JIRA issue as a template.
Adding Template Issue custom field to your screens is not mandatory.
Template (Epic) Cloner for JIRA will work without this but is highly recommended to use it.
If you add this field to your screens, you will be able to filter templates and production issues in easy way.