Template matching does not work when generating an envelope from the Print Driver. It does work however, when I drag and drop a document into an envelope. Is there a setting I should update?

All I could find on this was the recommendation that the Template and the document are both created with the Print Driver...see the following FAQ

https://support.docusign.com/en/articles/Print-Driver-FAQ

Specifically it states:

Will Template Matching be launched automatically?

• Yes, works best if document and template are created using print driver.

So perhaps you could try lowering the Template Matching threshhold to see if that helps or as suggested create the Template through the Print Driver as well (if that was not already the method it was created).