We made a decision long ago to keep a copy of the model inside the LayOut document in case you lost the link. Now you found the file? File->Document Setup->References, select the file. If it doesn't have the correct location to update, you can always help by clicking Relink, and find the location of the file. When you hit Unlink (not recommended) you are using only the file embedded in LayOut.
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ps - if you unzip a LayOut file, you'll find your models in the ref/ directory of the unzipped file.