Next's Link tool, can't find any files/anchors, and overwrites on cancel

Using the link tool seems broken, see this animated gif (recorded on latest Mac Chrome):


It doesn’t seem to find my files or anchors, and overwrites the code I’m writing.

Hey there,

That linking tool in the left menu is for referencing markdown files, not for creating links. It will overwrite/replace whatever you have written with the file it is referencing.