The issue: Composite images (images layered on other images and grouped into the same Word object) cause the citation/bibliography formatting process to fail.
How do I fix the issue?
- Click inside the image - you'll see a box around the images.
- Right-click inside the box (for Windows the keyboard shortcut is SHIFT+F10, for Mac it's Control+Click) to bring up the context menu, then select Save as Picture:
- Save the picture, then replace your composite image in the document with the saved one.
ALTERNATIVELY: Do the first 2 steps listed above, and click Group > Ungroup to revert the composite to separate images. Your citations and bibliography should then update as expected.