Yes

It was originally made for that purpose, since our designers started running into the same issue as the levels started growing.
You make a separate level, then make a root level template of that level like I explained above.
You'll be able to place it in other levels and it will stay up to date with the changes in the original level

You can check it out in Reaper's Coast (RC_Main) by browsing through the level templates in the World Outliner. One example would be Small_Dreamscene_Desert_000 with the original level being Small_Dreamscene_Desert.
You won't find that many level templates in our levels because most of them have been "exploded". That's a right-click function on a placed level template that turns the template into separate items in the level. That way it doesn't update anymore and the items and editable. It is often done after the template is finalized, to avoid accidental updates and so specific gameplay elements can be added for that local situation.