[Plugin: List category posts] Using templates

This might sound a lil bit too obvious, but I′m using the plugin and I′m trying to build a new template and it doesn′t seem to work…
I′ve tried putting the new template file on:
/WORDPRESS ROOT/wp-content/plugins/list-category-posts/templates/CUSTOM.PHP
and
/WORDPRESS ROOT/wp-content/themes/MY THEME/list-category-posts/CUSTOM.PHP
and call it using “template=custom” on the shortcode, but neither seem to work.

What am I doing wrong? Where is the ¨CUSTOM.PHP¨ template file supposed to go?

I′d really appreciate your help.

TY!

https://www.ads-software.com/extend/plugins/list-category-posts/