Looks like inconsistent browser implementation is the reason. On clicking option header, Chrome clears out the selection whereas IE doesn't, that's why Chrome inserts a new empty row at the bottom.
As a workaround, I am saving last selected value in a variable, and in case user clicks on header (which will make selection null), I am restoring the last selection. See fiddle. Not exactly pretty, but gets the work done.
$scope.checkSelection = function() {
if ($scope.selTemplates == null) {
$scope.selTemplates = last;
}
else {
last = $scope.selTemplates;
}
}