TALM rejects policies with any lookup functions. However, lookup on resources in the cluster namespace should work:

            data:
              test: |
                key1: value1
                key2:
                  testing: {{hub (lookup "cluster.open-cluster-management.io/v1" "ManagedCluster" "" .ManagedClusterName).metadata.labels.iantest hub}}


If this is allowed, it will enable many cluster specific templating to be done on the hub side for customers who would have to do spoke side templating instead (which is strongly discouraged)

1. Create a policy with templatized fields with lookup functions like the above
2. Create a CGU to roll it out
3.

Rejected as lookup function in general is not allowed:
1.6806157862255638e+09	ERROR	controllers.ClusterGroupUpgrade	Failed to resolve hub template	{"error": "lookup: template function is not supported in TALM"}

Policy remediated properly