Direct formatting is formatting not applied via a paragraph style. Usually, direct formatting is local, but nothing prevents you from selecting a whole document and applying bold formatting to it (for example by pressing Ctrl+B), which is why direct formatting is a better term.

Which kind of formatting is being incorrectly applied to the cross-references? Bold? Underline? Something else? Does that same formatting appear elsewhere in the document, for example in the cross-referenced captions?

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Stefan Blom
Microsoft Word MVP

Microsoft 365 apps for business
Windows 11 Professional