That's your choice. You can insert the file as regular text, which will not
update; or you can insert as a link, which will update.
In the Insert File dialog, select the file. Note that the Insert button has
an arrow at its right edge. Click the arrow to see a dropdown with items
"Insert" and "Insert as Link". If you select "Insert" you get regular text
that's no longer connected to the original file. If instead you select
"Insert as Link" you get an updatable field.
If you make changes to the source document and save it, then in the
destination document you can select the linked text and press F9 to update,
and the changes will appear. You should enable the option in Tools > Options
General, "Update automatic links at open" to have this happen
automatically each time you reopen the destination document.
It's also possible to send changes the other way. If you edit the copy of
the text in the destination document, press Ctrl+Shift+F7 to update the
source document. I'm not sure I would recommend this, though -- changes
should be made in the context of the original source to avoid human errors.
