Thanks for getting back. The issue is now resolved.
My installation runs on a Siteground server and used the PHP mail function AKA mail() or Native PHP function or PHPMailer. (hope those get picked up as keywords in subsequent searches in case other have same issue).
On the page ...../scp/emailsettings.php The Outgoing Email: Default MTA = None: Use PHP mail function
Because other email notices/alerts triggered by other templates were working I expected the template:Response/Reply to also work. There were no errors or reasons I could see why it was not working.
I read the PHP mail function is notoriusly unreliable and difficult to diagnose. As part of my diagnosis I changed to using standard IMAP and SMTP and when I did, the Response/Reply template started sending emails.
So the fix was to configure osTicket email to use SMTP and not PHPmail