The context of the page was not meant to be a template.

This is some edge case in Parsoid when the template name is considered templated and when the name turns out not to be a template, Parsoid falls back, and it seems to then just spit back the original wikitext for it. It doesn't fail in all cases, but I could reduce it to this test case:{{Foo {{1x|x}} <pre>x</pre>}}. Both the {{1x|x}} and <pre>x</pre> pieces are needed to reproduce this.