We are getting a strange error message in our ASP.NET MVC application. There error is thrown when we try to populate a dropdown list with some data.
At some point we got an error that says:

Uncaught ReferenceError: Disabled is not defined
at Object.eval [as template] (eval at compile (kendo.all.js:313050:21), :3:92)
at init._renderItem (kendo.all.js:313050:21)
at init._render (kendo.all.js:313050:21)
at init.refresh (kendo.all.js:313050:21)
at init.trigger (kendo.all.js:313050:21)
at init._process (kendo.all.js:313050:21)
at init.success (kendo.all.js:313050:21)
at success (kendo.all.js:313050:21)
at n.success (kendo.all.js:313050:21)
at fire (jquery-3.7.1.js:3223:31)

The error points at the following fucntion in kendo

(function anonymous(data) {
    var $kendoOutput, $kendoHtmlEncode = kendo.htmlEncode;
    with (data) {
        $kendoOutput = 'n        ';
        if (Disabled) {
            ;$kendoOutput += 'n        <span class="disabledText">' + $kendoHtmlEncode(Text) + ' </span> ';
        } else {
            ;$kendoOutput += 'n        <span>' + $kendoHtmlEncode(Text) + ' </span> ';
        }
        ;$kendoOutput += 'n    ';
    }
    return $kendoOutput;
})

The worst part is that this was working a month ago, meanwhile we did not change anything.
This is how we use the kendo.

<input id="clients" value="@Model.ClientId" style="width: 90%;" />
<script language="JavaScript">
    $(document).ready(function () {

        var clients = $("#clients").kendoDropDownList({
            dataTextField: "Text",
            dataValueField: "Value",
            template: kendo.template($("#activeDisabledTemplate").html()),
            filter: "contains",
            dataSource: {
                transport: {
                    read: {
                        type: "POST",
                        contentType: "application/json; charset=utf-8",
                        dataType: "json",
                        url: $.common_js.buildUrl("/FilterablePageData/Clients"),
                    }
                },
                requestStart: function () {
                    this.deferred = $.Deferred();
                    pageFilterPromises.push(this.deferred.promise());
                }
            },
            dataBound: function (e) {
                //  $(".disabledText").parent().click(false);
            }
        }).data("kendoDropDownList");

        clients.dataSource.bind("change", function () {
            this.deferred.resolve();
        });
    });
</script>

I can also confirm that we have a server response, because I can see it in the Network tab of the browser:

[
  {
    "disabled": false,
    "selected": false,
    "text": "All",
    "value": "_All"
  },
  {
    "disabled": false,
    "selected": false,
    "text": "A",
    "value": "A"
  }
}