Actually, David, it was not turned on in the preferences. For new imported text that I want linked, I import the tagged text file with it turned on the first time, then turn it off. The point is, if you have already set up the linked text file on purpose, even after you turn off that preference, using Place with another Tagged Text format file with the Remove Text Formatting box checked resets the option being used when Update Link is selected for previously linked text files.
Here's the test. I opened a document I have with Tagged Text format files that have been refreshed. I could update links, and the styles came in correctly. I didn't save, closed, and opened again. I then placed a Tagged Text format file with Import Options on, and checked the Remove Text Formatting box. The file was placed without the styles.
BUT now when I Update Links for my many linked Tagged Text format files, the default import options have been altered for those as well. Every Tagged Text format file that I had setup to update links now has the styles stripped out when I Update Links for refreshed text files. I have to actually import another file or relink and uncheck a box to get that dialog box again. So this happens independently of whether you have the preference set to create links for imported files. You can do it as a one-time thing for one file without that preference set, and not even create a link at all, and if you change the import options for that Tagged Text file, the default import options that you can no longer see for all of your Tagged Text files that appear as links to text will also change automatically.
What I would like to see is that linking to a text file would allow me a setting that says, no matter what you do when placing a Tagged Text file in the future, THIS specific link has now been set to permanently stick as not having the text format stripped out. I was hoping there was some way to do that, but it appears not. Ah, well.