I want to add an option under Create New to create a file of particular type. For example I use Rnote to create notes,. They have .rnote extension.

Now I create a empty file (image, 3rd option from above) with extension as .rnote , but that file when opened in the application can’t be written to, because it is not a proper .rnote file, it is empty file with that extension.
How do I quickly create a proper file for rnote or any application for example libreoffice?
I am on fedora 43, kde plasma.
Since your question has already been answered, here’s a bonus:
Add aDesktop Entryin~/.local/share/kio/servicemenus/to get right-click menu actions.e.g. to add to Dolphin (and Konqueror) right-click menu
[Desktop Entry] Type=Service ServiceTypes=KonqPopupMenu/Plugin MimeType=<MIME type of whichever type of file the application will work with>; Actions=NameOfAction Icon=icon-name-from-theme-for-desktop-entry [Desktop Action NameOfAction] Icon=icon-name-of-action-from-theme Name=Name of action that the user will see Exec=application-as-you-would-call-in-cli "%f"Oh…, that’s neat thanks!
So in my use case I made a template for prototype metadata, add a menu action could be to generate the file instead of creating from the template via
Exec=field. This would prepopulate the metadatafile with e.g. the list of selected files thanks to%F.
I didn’t fully understand this, but if you are saying that you want to run something that reads the selected files and creates a new file in the same directory from those contents, then yes, the service menu is a better option than a template.
While templates are meant for statically configured data, there might be some variable parameters available that I just don’t know of.
With the service menu thingy, you can just run any executable or shell script.
Exactly, and it works quite well, thanks for teaching me something new :)
Related documentation https://develop.kde.org/docs/apps/dolphin/service-menus/

