SQL Server 2017

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create table tbl
(
    ItemID int,
    ParentID int,
    TemplateID int
)
insert into tbl values
(1001, NULL, 86),
(1002, 86, 41),
(1003, 43, 44),
(1004, NULL, 43),
(1005, 44, 73);
5 rows affected

UPDATE t1
SET    ParentID = t2.ItemID
FROM   tbl t1
       INNER JOIN tbl t2 ON t1.ParentID = t2.TemplateID
3 rows affected

SELECT *
FROM   tbl


ItemID
ParentID
TemplateID


1001
null
86

1002
1001
41

1003
1004
44

1004
null
43

1005
1003
73