Index: src/wp-content/themes/twentyseventeen/functions.php
===================================================================
--- src/wp-content/themes/twentyseventeen/functions.php	(revision 39604)
+++ src/wp-content/themes/twentyseventeen/functions.php	(working copy)
@@ -488,16 +488,20 @@
 add_filter( 'wp_get_attachment_image_attributes', 'twentyseventeen_post_thumbnail_sizes_attr', 10, 3 );
 
 /**
- * Use front-page.php when Front page displays is set to a static page.
+ * Use front-page.php or Page Template when Front page displays is set to a static page.
  *
+ * 1. If Front page displays setting is set to Your latest posts, 'index.php' template is used.
+ * 2. If Front page displays setting is set to a static page, and any page with default page template is selected, 'front-page.php' template is used.
+ * 3. If custom page template is set to a page in step 2, that template is used.
+ *
  * @since Twenty Seventeen 1.0
  *
- * @param string $template front-page.php.
+ * @param string $template.
  *
- * @return string The template to be used: blank if is_home() is true (defaults to index.php), else $template.
+ * @return string $template.
  */
 function twentyseventeen_front_page_template( $template ) {
-	return is_home() ? '' : $template;
+	return ( is_home() || locate_template( get_page_template_slug() ) ) ? '' : $template;
 }
 add_filter( 'frontpage_template',  'twentyseventeen_front_page_template' );