The template DOES gray out a selected index. Look at the Kindlet index as an example.
My original comment was that it looked like the template had a problem with the "Index" index. But I see now that is only if a parameter is not passed to it. There is a separate line for when "Index" is passed in. It looks like it should work. I works fine in the Kindlet index.
Using the template, all those lines at the top (when you edit the whole page), are reduced to a single line.