Long Text Anchor Name

Ah, I see. So it it's your manual edit that is breaking the x-ref. When you update the x-refs, InDesign restores the defined text string it is pulling from the referenced paragraph and all is good again.

I think the best plan of action is to navigate to the text the x-ref is pulling from in chapter 4 and remove the spacebar space and add a non-breaking space (Type > Insert White Space > Non-breaking space) between the "E." and "Inserting..." and then update the x-ref.

It won't change the display in chapter 4 but you will get the desired result in the x-ref: the E. and Inserting will stay together.

~Barb

I'm having issue of long text anchor name and hyperlink not functioning correctly when spacing changes in the paragraph.

What spacing is changing, exactly? The leading (aka vertical line spacing)?

Can you please share a before/after screenshot? And does updating the x-refs somehow change the spacing back?

~Barb