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Description
Instanced internal references have a sort of "live" or "linked" behavior where you can update the reference target and all of the references will update immediately. This works within a single LayerStack, but when you create an external reference of the asset that is using internal references, that "linking" ends up flattened. Any overrides on the reference target in the new LayerStack is only applied to the reference target and the internal references are unaffected.
This confused some of our users and it'd be good to have an example asset to illustrate and document it. I've started work on this.
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