InstallShield, by default, uses new components for properties and dependencies. You should set this only for properties. You must also enter Tools | Options | .NET and change the default value.
As an aside, I think this template is so terrible that in fact I have an assembly automation step that looks at the assembly log for assemblies assembled in this way and forces the assembly to break. This is not a very deterministic process, and the scanner often adds dumb links, such as System.Windows.Forms.dll to the installer.
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