The way that xrefs work is they use a hidden bookmark. If you create a xref to a numbered item, Word puts in this hidden bookmark around the entire contents of the paragraph (but not the paragraph mark itself). If you happen to insert content at the start of a paragraph that has a bookmark start sitting in exactly the same location then you are inserting that content INSIDE the hidden bookmark. The cross ref is therefore now pointing at that inserted content + the original content.

This is important to know because when you moved #6, you effectively did this by positioning your cursor AT THE START of #2 para (inside the bookmark) and pasting in there. Therefore the NEW start of that hidden bookmark is now what was #6 but NOW is the new #2. There is now NO bookmark which starts at the beginning of the old #2.

When a xref to a paragraph number points at a bookmark that includes more than 1 paragraph, the number that shows is the paragraph number of the FIRST paragraph in the bookmark - hence the xref to #2 still points at #2 even though it SHOULD have been smart enough to adjust to point at #3 which is what it now is.

This can be hard to understand without seeing how bookmarks behave. There is an option setting in File>Options>Advanced>Show document content >Show bookmarks. If this is ticked, you can select the first word of a paragraph and add a bookmark. You should see grey brackets appear where the bookmark starts and ends. Now paste content at the location where that bookmark starts and see where the bookmark now starts. Try pasting the same content where the bookmark ends and see what happens there.

The hidden bookmarks Word puts in for xrefs won't show up with the option setting but they behave in exactly the same way.

For more detailed info with visuals, see Cross-referencing in Word – how cross-reference fields work and Word cross-references - troubleshooting

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Andrew Lockton
Chrysalis Design, Melbourne Australia