I used your code and got the same result. I wasn't clear enough in my original post - the REF fields in the Unconditional text behaves properly and does not unlink (remains a field after applying code); however, the REF fields within the Conditional text does NOT behave properly and DOES unlink - with my code AND with your code.

The issue still is I have a conditional section/paragraph that contains REF fields to another conditional section number. When you do the cross reference it refers to 1.1 since the section numbers do not get updated until you unlink the IF fields. However, that section number DOES NOT update but DOES unlink even though we are telling it not to - and after applying the code the text reads section 1.1 (rather than section 3.1). The REF fields in the unconditional section/paragraph remain fields so they can be updated, but the REF fields in the conditional section/paragraph are now plain text.