...
> Following a RENAME, after you have used either the link name or the
> original target file name for the RENAME, you must then PURGELINK the
> old link and then establish a new link using NEWLINK, if you wish your
> link to follow the newly renamed file.

Correct.  Looking at how RENAME is implemented explains this behavior:
  1. fopens the first filename arg.  Fopen follows symlinks.
  2. calls FRENAME to do the work.

So RENAME will always act upon the target of a symlink as the first
parameter.  The FRENAME intrinsic is passed a file number, not a name,
and has no idea that that file number was derived via a symlink or not.
FRENAME removes the original target name from the directory, which is
the target name, not the symlink name.

Hope this helps,
 Jeff