Description of problem: When customers are upgrading from previous versions with Director and are using custom templates, it should be up to them to make sure that the custom templates are up-to-date both in heat version and in content as functions can be added or removed between versions. Information about the various versions is here: https://docs.openstack.org/developer/heat/template_guide/hot_spec.html#heat-template-version Setting this to High, as it might actually fail upgrades. The fix here would be to go over the custom templates and very carefully update them to a newer, supported version.
So this is actually a Heat bug and it will address this issue there. No need to document it as fixing the bug will stop the version mismatch.