Following Configuration:

Multisite - 1.2.75
Patches - 1.2.77
Joomla - 2.5.1
php - 5.3.10

Steps:

When I created the template I selected a user as the Admin, that user had administrator rights
Used the template to create a new slave site
Changed the email address and password for the user during the slave site creation
Both the email & the password were still the original in the new slave site

BUT the email and password changed on the user in the master site's database

Tested this on back end only.

As you can read in another post where we replied to a similar question, the update is performed on the "admin user" that you have selected and if you didn't selected any user, the update is performed on the first "Super Admin" user that is find in the DB.

So select an "admin user" on which you want that the new login, email, password is applied.

I did select an admin. I specifically created an admin user to use for this testing and selected in the template that I used. I verified this multiple times on 1.2.75 and it consistently did not work as described below.

I'd select the admin in the template
When I created the slave site the users would be identical to how the "were" in the master site before the slave creation even though I changed the email and password.
After the slave creation, the admin user selected during the slave creation on the "MASTER" site changed to the new email & password

After I upgraded to 1.2.76 it updated the email and password on both the slave site AND the master site

I don't think the change on the master site is expected.

This is all being done from the backend

I will try reproducing what you described.

I confirm that I am able to reproduce it on joomla 2.5.1 as described in your post.
So now, I can investigate it and fix it.

We fixed it and this will be available in the next release JMS 1.2.77