The feature did work in the past however pages now seem to default to 'Default Template'.
I can see my available page templates in the drop-down on the Page edit page, however after saving the admin simply shows 'Default Template' again.
I have tried disabling all plugins as well as remaking some of the templates, however the behaviour continues.
Update: After some digging it would appear that I am getting 'Table xxx/wp_postmeta' is marked as crashed and should be repaired". However running repair through phpmyadmin does not fix the issue.