New Blog Templates not applying default template to new blogs

Hello, I have noticed a problem today with new user registrations on the site we are developing.

I have set up just one template blog and have set it to be the default. I assumed that if I did not tick "Show templates selection on registration" then all new sites would automatically get the default template. However, this isn't working - the new sites are being set up with the Twenty Thirteen theme and non of the template settings.

If I DO tick that box it works OK but only if our new users realise that they MUST select the template in order for their new site to work properly. It is not selected as a default - "none" will be selected if they don't manually choose the template.

I did update to the latest version of wordpress yesterday, and updated some plugins, I think this may have been one of them. But unfortunately I can't be sure that it was working correctly before yesterday.

Help!