This solves the mystery why I wasn’t able to Unlink the Excel file from the links panel.
Once I enabled the “Create Links When Placing Text and Spreadsheet Files” checkbox in File Handling preferences and relinked the file, the Unlink option magically appeared.
The bad news was once I relink the file all the text disappears. The linked Excel file didn’t correlate with the actual copy in any way. This is a big document and there are a lot of linked boxes (i only sent one page) so it looks like I will have to recreate them manually.
It seem like whatever was placed before the checkbox was enabled cannot be unlinked anymore but the preference option mentioned should help avoid the same thing from happening in the future.