Inserted Blocks do not update materials

I am also having a similar issue. When the file that is being referenced is changed, the file referencing it will not update. I have to go to the material in the new file and make changes there. The file I have is too large to send and contains sensitive information so I cannot send it as is. I tried removing everything except the referenced block, now the block updates in the reference. I am not sure if this information is helpful or not. Here are the settings I use when inserting references as blocks