I have a document with many sections:

1.1 Section A
1.2 Section B
1.3 Section C



So I inserted a cross-reference to the "paragraph number" and "paragraph text":

For more information see 1.2 Section B.

But when I insert a new Section A2 under Section A:

1.1 Section A
1.2 Section A2
1.3 Section B
1.4 Section C

And I update the cross-reference (Ctrl+A, F9; or right-click cross-reference, Update Field), it does not update. Worse, sometimes Word dumps the entire content of Section B in place of my cross-reference.

My question: What is the "correct" way of inserting new sections, or moving the sections so that the cross-references can be updated correctly?

I'm using Word 2016.

When you create a cross-reference to a heading, Word creates a hidden bookmark for the heading. The behaviour you're seeing with the cross-reference expanding is because you're creating a paragraph break within the bookmarked range of the existing heading (presumably you're doing this at the start of the next heading). When you update the cross-reference to the bookmark, the cross-reference, naturally enough, picks up the expanded bookmark range. The solution is to insert your paragraph breaks for the new content at the end of the paragraph you want the new one to follow.

If you toggle Word's bookmark display on (File|Options|Advanced>Show document content) and hidden bookmark display on (Insert|Bookmark), you'll see these bookmarks more clearly.

And, of course, for the new headings to show up in an updated TOC, they need to have the appropriate heading Style applied.

__________________
Cheers,
Paul Edstein
[Fmr MS MVP - Word]