I am running Word for Mac 15.23.1 (on Sierra 10.12.1). I am doing the following:

- Insert->Pictures->Picture From File...
- Click on "options" in the bottom-left corner
- Check both the "Link to file" and "Save with document" boxes
- Select the file I want to add and then click Insert

My understanding is that the "link to file" option is supposed to mean that if the image is subsequently updated, the updated image will appear in the document automatically. Also, my understanding is that checking the "save to document" box means that if I send the Word file to someone else, the image will actually be embedded in the document, so they can see it. However, the "link to file" option doesn't seem to work. For example, if I insert "x.jpg" using the above method, and then modify x.jpg, nothing changes in the Word file (even if I restart Word and reload the Word document). Any idea what I'm doing wrong?