AI 28.5 Searching for location of EMBEDDED images

Ever since the recent update, I get this pop-up window (screenshot attached) every time I open a file with an EMBEDDED image. It will take several minutes for the bar to fill, but if I hit “Stop” the file will open. Although working in the file, there is some lag and the pop-up window will reappear periodically. Re-saving the files can take 10X longer than normal. It's a massive time killer. 

I found out what the issue is, but it doesn't make sense to me. Illustrator is trying to 'verify access' to the original file location of EMBEDDED images within the file.

We recently upgraded to a new server at work. I manage hundreds of files that contain embedded images, all of which were originally created on our older server. So every time I open a file, Illustrator is trying to verify access to a non-existent location. I could see this being an issue with LINKED images, but why in the world is AI searching for a file path to images that are EMBEDDED?? Isn't that the point of embedding?