Can someone please help explain why Solidworks is not updating the external references in this assembly model?  Here is what I have done to create the assembly:

1. Created a new assembly – called it “Top Level”.
2. Created a part in “Top Level” via Insert – Component – New Part.
3. Choose the front reference plane to place the part
4. Renamed the part in the tree to Part 1
5. Created some geometry in Part 1
6. Saved the part to disk via RBM on virtual part, then “Save to external file”
7. Create another part in “Top Level” via Insert – Component – New Part
8. Choose the front reference plane to place the part
9. Rename the part in the tree to “Document to be replaced”
10. Created some geometry in “Document to be replaced” using some references from Part 1 to define the geometry in “Document to be replaced”. “Document to be replaced” is now an in-context part.
11. Saved the part to disk via RMB on virtual part, then “Save to external file”
12. Create another part in “Top Level” via Insert – Component – New Part
13. Choose the front reference plane to place the part
14. Rename the part in the tree to “Document for replacement”
15. Created some geometry in “Document for replacement” using some references from Part 1 only to define the geometry in “Document for replacement”. “Document for replacement” is now an in-context part.
16. Saved the part to disk via RMB on virtual part, then “Save to external file”
17. Now, File – Pack & Go from “Top Level” to new folder on disk.  Capture all referenced documents to new name (add suffix of “ – 2”) with the exception of Part 1.  Part 1 must not be renamed.
18. We will now have “Top Level – 2” as the new top level assembly which has “Part 1”, “Document to be replaced – 2”, & “Document for replacement – 2” as child components in a new folder on the hard drive.
19. Open “Top Level 2”.  All child components should be in-context as it was created via Pack & Go.
20. Delete “Document for replacement – 2” from the tree. Hit Save in “Top Level – 2”.
21. Important: Close “Top Level -2” and open it again to clear memory
22. Now, RMB on “Document to be replaced -2”, and select “Replace Components”
23. Replace it with “Document for replacement – 2”.  It will be out of context.

Now, I have two questions:

1. Why is it out of context when we just saw it was in-context(Step 19)
2. Keeping in mind that for my settings, the setting “Options – External References – Update component names when documents are replaced” is checked, why didn’t Solidworks rename the referenced entity to the new name of “Document for replacement -2”?

If you look at the “List external references” dialog for the component “Document for replacement -2”, you will notice the top level assembly has changed (as expected) to “Top Level – 2”.  However, the column that lists the Feature’s component has not updated.  Is this a bug or is there another way to do this such that it updates correctly?

As this description is quite long, I will attach the models I’m using if it helps you.  In folder 1, you will find the original “Top Level” assembly.  Folder 2 contains “Top Level -2” assembly with the replaced component showing out of context.  Thank you kindly for looking into this.