I have been seeing this quite a bit in my inbox lately and I thought I would share to hopefully help some others.
Many of my themes use a reusable custom blog page template to allow you to control which posts show, allow multiple blog pages, set the number the columns/layout and so on. Let’s say it’s called page-custom-blog.php.
One issue arises quite often, in the Settings Reading SubPanel of the WordPress admin, there is a setting to set a static home and posts page. Setting your home page is a great feature but the “Posts Page” dropdown really confuses people.
When you tell Wordpress to use a page as your dedicated posts page, it’s actually reverting to index.php behind the scenes instead of page-custom-blog.php (like above) to show your posts and loses all the functionality of a custom blog page.
Hope this helps others who may have been experiencing this on other similar templates.
(I realize you could just beef up index.php to include/feed in options like a custom page above, but a custom page template is reusable)
Thanks for share Curt