Some more technical details about your document.
If you click in the TOC, then press Alt+F9, youÿll notice that the TOC
field includes the ´\u¡ switch:
TOC \o "1-3" \h \z \u
This ´\u¡ switch was introduced in MS Word 2003 and means ´build the TOC
using paragraph outline levels¡. This is why your TOC includes the pictures
associated with ´outline level 1¡ when you try to update it.
So if you want your table to update as expected, all you have to do is
change the TOC field syntax from ´TOC \o "1-3" \h \z \u¡ to ´TOC \o "1-3"
\h \z¡.
Note that this document also includes unwanted header text in the second
section (TOC pages). If you want to remove these texts, display the
headers, click in each header, press Ctrl+A, then the Del key.

That fixed it !

Lynn