Creating a file by clicking an unresolved link ignores "New link format" settings

Steps to reproduce

(Note: Please refer to the first GIF in the Additional information section for a visual demonstration.)

  1. Go to Settings > Files & Links.

  2. Change the New link format setting to path from vault folder (or path from curernt file).

  3. Create a new markdown file and type an unresolved link (e.g., [[Non-existent File]]).

  4. Click on this unresolved link to create the new file.

Did you follow the troubleshooting guide? [Y/N]

Y

Expected result

After the new file is created by clicking, the original link’s target state changes from a non-existent file to an existing file. At this point, the original link should automatically update its text/format to respect the configured New link format

  • Example: automatically expanding to
    [[Folder1/SubFolder2/this is an unresolved link|this is an unresolved link]]

  • [[ + file.path + | + custom name + ]]

Actual result

The new file is successfully created, but the original link remains exactly as it was typed. It does not update to follow the configured New link format rules.

  • Example: [[this is an unresolved link]]

  • [[ + file.name + ]]

Consequence:
Because the link format isn’t updated correctly, if I later drag and move this file into a new folder, Obsidian updates the link to display only the raw file path without a custom display text (Note: I mean the display text after the |, not a YAML alias). This makes the link visually cluttered and very difficult to read.

  • Example: (Please refer to the second GIF in the Additional information section for a visual demonstration of this issue.)

Environment

SYSTEM INFO:
	Obsidian version: 1.12.5
	Installer version: 1.10.6
	Operating system: Darwin Kernel Version 25.3.0: Wed Jan 28 20:53:31 PST 2026; root:xnu-12377.81.4~5/RELEASE_ARM64_T8122 25.3.0
	Login status: logged in
	Language: en
	Catalyst license: insider
	Insider build toggle: on
	Live preview: on
	Base theme: adapt to system
	Community theme: none
	Snippets enabled: 0
	Restricted mode: off
	Plugins installed: 1
	Plugins enabled: 0

RECOMMENDATIONS:
	none





Additional information

GIF 1

Untitled design-4

GIF 2

Untitled design-3