Layer Style in Block Insert

I’m having an issue with inserting blocks. I have a file where I’ve previously successfully inserted many linked blocks from external files and all of these have populated their layers into Grandparent layers as should happen when inserting with the Reference option selected for layer style.

The problem is that all those inserts were done a few weeks back, and now every time I try to insert a new block the layers populate to the top level of the layer tree no matter which layer style I select when given the insert prompt.