I've followed the instructions exactly.

In the original document, the field coding is as follows.

{IF {INCLUDEPICTURE { IF TRUE "C:\Daniel\{MERGEFIELD Picture}.JPG" } \d} {INCLUDEPICTURE {IF TRUE "C:\Daniel\{MERGEFIELD Picture}.JPG" } \d}

Then once I merge the document, the pictures do appear and it has merged perfectly.

However, within that document, if I press ALT + F9, it shows the following field coding.

{ INCLUDEPICTURE \d "C:\\Daniel\\1.JPG" \* MERGEFORMATINET }

The picture is not actually un-linked...
I've been working on this for many hours following your instructions. I would appreciate any helpful input on why the picture is not "Unlinking"