It sucks because it doesn't work as expected.
Try the attached template. When creating a project don't fill in anything just push OK, OK and kaboom.
In your project.ini file the Variables section is empty. I added this and it works:
[Variables]
MAINUNIT=New filename for the Unit1.pas file
TITLE=Form Caption
BTNCAPTION=Button Caption
If nothing is filled in defaults should be used as in new project.
True. It could be improved. Any non-defined variable should get a sensible value, for example the variable name itself. Thus variable MAINUNIT would have value MAINUNIT. It would work and prevent crashes.
Also the initial dialog asking for project name and directory should have OK button disabled as long as the necessary info is not given.
See also the example template in the issue I linked earlier.
Patches are still welcome...