Renaming a file changes its original name and full path location. Other applications referencing that file typically rely on this exact name and path to locate it. Therefore, renaming the original file generally breaks references in other apps or documents because the pointer to the file (its old name) no longer matches the actual file name. This differs from simply saving a new version under the same name, which usually maintains existing references.

Common examples include hyperlinks in Microsoft Word or Excel documents breaking if the target file they link to is renamed. Similarly, programming scripts or data analysis workflows (e.g., in Python using Pandas) will fail if the filename specified in the code (like data.csv) is changed to something else (like sales_data.csv) and the code isn't updated accordingly.

The main advantage of renaming is clearer file organization. The major limitation is the disruption to dependent files or applications. Mitigation involves updating references manually, using apps that track files by unique ID instead of name (like some digital asset managers), or employing consistent communication when renaming shared files. Adoption of more robust reference management strategies reduces this issue.