There are multiple problems here. First, there's the unsupported claim that the AGPL is somehow incompatible with being production-ready, which seems obviously false. But more seriously, there's the proposition that GitHub should crack down on this project, which I find to be absolutely bizarre.
The person who opened that issue also made some other claims, like that a more permissive license would allow the project to reach a broader audience. That's undoubtedly true, but I'm going to go out on a limb and say that the author of the project is probably well aware of that and chose an appropriate license based on their own goals.
It is dangerous to allow project templates to have a copyleft license. Any project that uses it could be argued as a derivative work. For this behavior in your application it should be explicitly disallowed or at minimum a red dialog.
It’s about the workflow for project templates. If there were a warning when creating or cloning that is one thing. But a folder structure, config files for tools, potentially requires the whole project to be a derivative?
It is dangerous to allow project templates to have a copyright license. Any project that uses it will be a derivative work. For this behavior in your application it should be explicitly disallowed or at minimum a red dialog.
The person who opened that issue also made some other claims, like that a more permissive license would allow the project to reach a broader audience. That's undoubtedly true, but I'm going to go out on a limb and say that the author of the project is probably well aware of that and chose an appropriate license based on their own goals.